Fridman Is Acting TNK-BP Chief As CEO Hunt Drags On

Mikhail Fridman
(Click to Enlarge)

LONDON (Dow Jones Newswires), May 27, 2009

Mikhail Fridman, one of the powerful Russian billionaires partnered in BP PLC's (BP) Russian joint venture TNK-BP, will become the company's acting Chief Executive as the hunt for a permanent CEO continues almost six months beyond the original deadline, the company said Wednesday.

Fridman, who played a key role in a bitter dispute with BP last year over control of the company, could remain as chief executive until the end of the year while two new executives appointed Wednesday are vetted to replace him permanently in the position, BP said in a statement.

The new executives are Pavel Skitovich, a former executive at private investment firm Interros and Polyus Gold (PLZL.RS) and Maxim Barsky, a board member at West Siberia Resources. "Each has the credentials to become a new CEO," BP said.

"I am happy to help in the interim and comfortable that day-to-day operations will remain in the capable hands of the current management team," Fridman said. BP Chief Executive Tony Hayward said he is also very pleased with the transition plan.

Fridman is one of the partners in the Alfa-Access-Renova consortium, which holds 50% of TNK-BP, along with Viktor Vekselberg, Len Blavatnik and German Khan.

During last year's dispute, BP staff at the joint venture came under intense pressure. Former Chief Executive Robert Dudley and 148 BP staff on secondment were forced to leave Russia in July, claiming sustained harassment from Russian authorities after running into visa difficulties. Chief Financial Officer James Owen quit soon after, citing difficult working conditions.

The dispute ended when Dudley agreed to step down in September. Chief Operating Officer Tim Summers has been acting CEO since then and will now return to that role.

Fridman's appointment shows TNK-BP is an unequal partnership, said Oppenheimer analyst Fadel Gheit. "BP has very little choice, they own 50% but the Russians hold the keys," he said.

"There is no love lost," between BP and its Russian partners, but they have to coexist and BP Chief Executive Tony Hayward is doing his best to preserve shareholder value, Gheit added.

The change may be less of a power struggle than it appears, said ING analyst Jason Kenney. "Acting CEO (Tim Summers) was a BP guy, so it's time for a change of guard," he said. "The medium term aim is to get an independent CEO and in the interim you still need some guidance at the top," he added.

At 1518 GMT, BP shares were unchanged at 505 pence.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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