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28 Jul, 2010 17:51

Dudley’s Russian toil ensures TNK joint venture will stay with BP

Russian shareholders of TNK-BP last saw Robert Dudley two years ago when a corporate row led to him leaving the country, but now he's back as head of the global operation.

The name Bob Dudley prompts mixed memories in Russia. His departure from the post of TNK-BP CEO – accused of acting against the interests of Russian shareholders back in 2008 – left a bitter taste. But no-one would underestimate his part in building Russia’s third largest oil producer, or his managerial skills, according to Chris Weafer, Chief Strategist at Uralsib.

“He’s the right person for the job now for BP. Clearly the situation in BP demanded change at the top. It’s quite obvious that BP is not going to be able to address the problems in the United States with Tony Hayward still in charge, so to that extent changing Hayward was no choice. Bob Dudley, a lot has been made of the fact that he is American and knows that region well, but also the fact that he was the chief executive of TNK-BP during a very contentious period of that company’s history, in 2008. BP think s that he has the right credentials to take on this challenge for BP, particularly in the United States.”

They key priority he faces in moving on from the Transocean-Macondo oil disaster is finding an estimated $30 billion to fund costs relating to it. The company has already has recently announced deal to sell $7 billion in North American and Egyptian assets to Apache, and ExxonMobile and Chevron are believed to be in talks. Peter Necarsulmer, Chairman and CEO of the PBN Company says the importance of Russia to BP means that its stake in the TNK-BP joint venture is unlikely to be on the table, despite the events of two years ago.

"Russia is extraordinarily important to BP from every perspective, the excellent financial results for the first half of the year, coming out of TNK today, is over 2 billion in profit, just underscores.  As a CEO Mr Dudley will have no choice but to spend considerable effort and energy. There is now way this can sort of be delegated. Bob actually became kind of a scapegoat by a lot of people at BP, quite frankly, for the dispute. The fact that he is now taking over as captain of the ship and will be ultimately responsible for BP’s posture, policy, for BP’s negotiations with the Russian government and the Russian partners. It would end up being one of the great corporate stories to be told."

Outgoing BP CEO, Tony Hayward, is going to be nominated for a board seat at TNK-BP, which analysts believe will not rekindle the dispute. Hayward’s post as non-executive director won’t require his presence in Russia, with any greater role for him, in the Russo-British consortium, having been ruled out.