UPDATE 2-BP nominates Pavel Skitovich for TNK-BP CEO

* Skitovich is ex-Polyus Gold CEO, has worked for Potanin

* Viktor Vekselberg could be appointed interim CEO-source

* Current CEO's contract expires on June 1

(Adds details, background)

By Tom Bergin and Robin Paxton

LONDON/MOSCOW, May 25 (Reuters) - BP (BP.L) has nominated a former employee of Russian billionaire Vladimir Potanin as its choice for chief executive at TNK-BP in a move it hopes will end a shareholder conflict at Russia's third-largest oil producer. Pavel Skitovich, BP's choice to run its Russian joint venture, has worked for Potanin's Interros company and spent five months in 2007 as chief executive of Polyus Gold (PLZL.MM), the country's largest gold miner.

"As far as we are concerned, the search for a new CEO is over. We have formally nominated a very strong candidate and we hope that the approval process will be completed in due course," BP spokesman Toby Odone said.

BP and the quartet of Russia-connected billionaires who share control of TNK-BP fell out publicly last year in a dispute that spooked foreign investors and led to the departure of many expatriate staff, including then chief executive Robert Dudley.

Though both sides say they have resolved their differences, a permanent chief executive has yet to be appointed. Tim Summers, the former chief operating officer now serving as CEO, has said his contract expires on June 1. [ID:nLT433469]

BP retains the right to nominate a chief executive for TNK-BP, but the Russia-connected shareholders have insisted the candidate be a Russian speaker with experience in the country. Skitovich, 44, was a Soviet vice-consul in Uganda early in his career and has subsequently worked for various companies within the Interros group, including Norilsk Nickel (GMKN.MM) and Power Machines, the latter of which Interros has since sold.

Skitovich, reached by telephone, declined to comment on his nomination. A source close to the businessman said he no longer worked for Interros.

His stint at Polyus was short-lived. Industry sources said at the time he was representing Potanin's interest in the miner at the time when co-owner -- and Potanin's partner-turned-rival Mikhail Prokhorov -- resumed the chairmanship of the company.

INTERIM CEO

Another industry source, who declined to be named, said BP could agree to the appointment of a new interim chief executive should the appointment of Skitovich not be approved prior to the expiry of Summers' contract in a week's time.

Viktor Vekselberg, one of the four Russia-connected businessmen with a 12.5 percent stake in TNK-BP, is a possible candidate, the source told Reuters. But his appointment would not be permanent, as the CEO must be neutral, he said.

TNK-BP last year elected a new board comprising an independent director as well as an equal number of representatives of BP and Alfa-Access-Renova, the grouping which represents the Russian side.

One of the conditions of the truce between the shareholders had been that the new chief executive would be independent from either side.

Denis Morozov, the former Norilsk Nickel chief executive, had been seen as a likely candidate for the post but talks with him ground to a halt earlier this year.

TNK-BP, which returned to profit in the first quarter after a loss-making end to 2008, declined to comment on the nomination, saying it was a matter for its shareholders. [ID:nLL411012]

"The company has been, and is operating in a normal business mode. These shareholder discussions have no impact on our operations," TNK-BP spokeswoman Marina Dracheva said. (Editing by Jon Loades-Carter)