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8 Jul, 2008 09:11

Robert Dudley survives as CEO of TNK-BP

Robert Dudley, CEO of Anglo-Russian oil giant TNK-BP, has survived a vote on whether to extend his contract. Victor Vekselberg, a member of the TNK-BP board representing Russian shareholders, had called for the embattled boss to go, and be replaced by a

It's the latest turn in an on-going dispute over the future strategy of the company. The Russian shareholders blamed TNK-BP CEO Robert Dudley for what they said was the company’s poor performance and favouring the interests of BP. The agenda of Monday’s shareholders’ meeting was Dudley's replacement.

Uralsib Chief Strategist, Chris Weafer, notes "It's actually just designed to increase pressure on the situation, in order to keep the momentum going, to try and reach some sort of resolution, perhaps either to force BP into agreeing some terms, or perhaps alternatively to force the situation so that they have to move to the next stage. And the next stage inevitably is that they have to go to some form of independent arbitration.''

But the board of directors voted against the termination of Robert Dudley’s contract. The decision was widely expected, as three of the five TNK-BP board members were nominated by Dudley. However, analysts say this is not the end of the game in the long-running battle for control of the company, with Uralsib looking for Gazpromneft to take eventual control.

“The end of this process, we believe, will be a merger of Gazpromneft oil assets along with TNK-BP, with Gazpromneft having 51% control, and BP probably having 25%.  In other words, conforming exactly to the rules of the game we now see emerging in the energy sector.”

The move comes straight after BP filed a suit in London against its Russian partners to recover $US 360 million in a debt relating to a back-tax claim predating the formation of TNK-BP in 2003.

The next development in the TNK-BP story is expected to happen on July the 8th when a government agency will decide on how many foreign employees TNK-BP can keep in Moscow.