June 10, 2013 / 2:30 PM / in 5 years

TNK-BP veteran Muir heads up Alfa investment vehicle-sources

LONDON/MOSCOW, June 10 (Reuters) - A vehicle to reinvest nearly $14 billion earned by two Russian billionaires from their stake in TNK-BP will be headed by Jonathan Muir, who as the oil venture’s finance chief managed billions in dividend flows, three sources said.

Soviet-born tycoons Mikhail Fridman and German Khan, together with associates from their Alfa Group consortium, want to plough their proceeds from the sale of TNK-BP, a partnership with BP, into international oil and telecoms.

TNK-BP’s co-owners of nearly 10 years - BP, Fridman, Khan and two other tycoons - received a total of $55 billion from Rosneft in a deal that handed the Russian state oil major the world’s largest crude oil reserves and installed BP as its 20 percent shareholder.

Last week Russian media reported that Khan had moved his operational base to A1, a private-equity style entity which grew out of Alfa’s old oil and commodity trading arm, Alfa-Eco, where Khan spent his early years in business.

“Jonathan is already over there,” said one of the sources. Another source said his immediate focus as chief executive was on running a low-risk treasury operation.

Alfa representatives declined to comment.

It was not immediately clear whether Muir, an oil executive in Russia for a decade and a half, would head A1 itself, or a specialised A1 unit set up to manage the oil and telecoms investments. He is expected to be London-based.

The Briton left TNK-BP with Khan and another of the company’s co-owners, Viktor Vekselberg, in the first wave of executives to depart when the merger was completed in March.

TNK-BP generated $19 billion in dividends paid to BP, the oligarchs and minorities under Muir, who before joining TNK-BP was an executive at Sidanco, one of the oil assets pooled by BP and its tycoon partners in 2003 to create the 50-50 partnership.

Sources familiar with the oligarchs’ plans say they don’t plan to re-create TNK-BP and are likely to look for exploration opportunities in regions such as Latin America, as well as to reinvest some money in Russia.

Oil industry sources see the vehicle as possibly being modeled on Vallares, a cash shell founded by financier Nat Rothschild which later bought Turkey’s Genel Energy, a producer focused on the autonomous Iraqi region of Kurdistan.

Former BP CEO Tony Hayward took over at Vallares after leaving BP and now heads Genel, while John Browne, Hayward’s predecessor, is a partner in Riverstone, a private equity fund focused on energy, where he is co-head of renewables funds.

Khan met Browne and Hayward and other potential deal partners in London earlier this year, sources familiar with the discussions have said.

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