MOSCOW Nov 3BP has written to its main
partner in TNK-BP asking for an assurance there be no
repeat of what the British oil company said was a breakdown in
corporate governance at the main operating unit of its Russian
BP said the unit -- TNK-BP Holding (TBH) -- went to court in
support of a $2.8 billion lawsuit against two BP executives
without the approval of TBH's board.
The move "was a breach of the charter of TBH by the
management of TBH," BP Russian Investments director Robert
Norris said in a letter -- sent last week and seen by Reuters --
to Alfa-Access-Renova, a consortium of four Soviet-born
billionaires who jointly own TNK-BP with BP.
"If this were done with the assistance, encouragement or
awareness of a shareholder or a shareholder nominated director,
that would also appear to be a breach of the shareholder
agreement by such a shareholder," Norris said.
An official at AAR declined to comment.
While BP is asking AAR to adhere to their TNK-BP shareholder
agreement, its own adherence to the rules of governance at
Russia's No. 3 oil producer is at issue in Stockholm arbitration
proceedings called to determine whether BP was within its rights
to join forces with state oil company Rosneft in a
deal outside the scope of its partnership with AAR.
AAR said BP could only pursue the Rosneft deal through
TNK-BP, and the deal collapsed when AAR refused a $32 billion
offer from BP and Rosneft to exit TNK-BP and clear the way for
what would have been a landmark Arctic drilling deal.
Instead, the joint venture to develop three prime offshore
blocks in the Kara Sea went to U.S. group ExxonMobil ,
with AAR and BP left to squabble over the matter.
As the arbitration process enters its ninth month, each side
appears keen to ensure scrutiny of the opposing side's behaviour
and demonstrate good faith on its own behalf.
AAR and BP say TNK-BP is operating normally and, as a sign
of peace between them, point to an Oct. 21 deal to allow Alfa
Group head Mikhail Fridman to remain as chief executive for two
more years, after the departure of deputy CEO Maxim Barsky.
TBH is the core unit of the TNK-BP group of companies where
production, refining and marketing are concentrated.
Sources close to both sides said the letter had prompted an
exchange of correspondence but no result to date -- while the
AAR-BP shareholder agreement says TNK-BP cannot take legal
action worth more than $100 million without leave from the
board, there appears to be little agreement on how that rule
applies to subsidiaries and management.
BP faces legal action led by a small TNK-BP shareholder
whose suits say TNK-BP lost billions of dollars when BP failed
to tie up with Rosneft, a deal that was to be sealed by an
exchange of shares.
BP said TBH filed an appeal against a judge's ruling that a
suit against the BP directors did not have enough shareholder
support, a likely precursor to its dismissal. While TBH had
proposed to its board that it join the suit against the two
directors, the appeal was filed before the board met.
In its letter, BP said the appeal by TBH must be withdrawn
and an investigation launched into the matter.
It also said there should be "disciplinary action against
any management member whom the audit committee considers to have
knowingly breached the charter, corporate governance rules of
TNK-BP Group or the shareholders agreement."
Separately, just before his departure, Barsky signed a
letter recommending TNK-BP take legal action against BP for
damages, sources said. That proposal may be heard by the board
on Nov. 10.