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17 Jun, 2008 04:00

Fridman blames BP management for TNK-BP’s poor performance

Russian billionaire Mikhail Fridman, chairman of oil giant TNK-BP, has renewed his criticism of the joint venture's management. He has threatened new legal moves to defend the Russian shareholders' interests and said they want to get rid of the company’s

“Even our patience has limits” Fridman said in the latest twist in the TNK-BP battle.

Speaking on behalf of the AAR consortium of Russian investors, he accused the firm of poor performance, and said it had rejected suggestions for improving its corporate governance.

Fridman has said one of their main grievances was BP’s rejection of over 20 overseas projects proposed by TNK-BP. He has compared TNK-BP’s performance with its rival Lukoil which has made significant expansions abroad. 
The tycoon noted that in 2003 the market capitalization of both oil companies was almost equal. But now the capitalisation of the joint venture makes up nearly $US36 billion while Lukoil is worth over $US90 billion.

Russian shareholders are demanding a cut in TNK-BP's foreign staff and a new, independent CEO in place of Robert Dudley, who they accuse of putting BP's interests first in the management of the firm.

Fridman has pointed out that they want “independent directors in the board of TNK-BP”.

The contradictory views of Russian and British management of TNK-BP is seemingly a core source of the conflict.

Aleksandr Razuvaev, an equity research specialist at Sobinbank, has told RT he believes “a conflict of interests” is at the bottom of the ongoing dispute.

“As for the Russian shareholders, they would prefer to develop TNK-BP as a leading Russian oil company with remarkable prospects in foreign companies,” he said. “For BP, the TNK-BP company is actually nothing more than an affiliated company in Russia.”

Fridman has stressed that he sees the global strategy of the company as being an “independent private Russian-based oil producer”.

He believes the company has huge prospects for growth following the forthcoming tax cuts for oil producers and spiraling oil prices.

The next move in the struggle for the future of the company could be a board meeting on June 26, which Fridman has promised to try to block via the courts.

Russia’s Deputy Prime Minister and Finance Minister Aleksey Kudrin told journalists on Tuesday that the ongoing conflict between shareholders in TNK-BP will not have a significant impact on the investment climate in Russia.

Kudrin has described the dispute as “an isolated incident”, and expressed hope that it will be resolved in a civilised manner within the boundaries of corporate legislation.