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Oligarchs Win BP Concession In TNK Peace Deal

TNK-BP CEO Robert Dudley will step down as part of the deal.
LONDON (Reuters) -- British oil major BP has made a new concession to its oligarch partners in Russia's third-largest oil company, TNK-BP, as it sealed an agreement aimed at settling a battle for control of the venture.

BP spokesman Toby Odone said that under the deal, German Khan and Viktor Vekselberg, two of the four billionaires that form the Alfa Access-Renova (AAR) consortium that owns 50 percent of TNK-BP, will keep their management board roles.

When BP reached a preliminary settlement with AAR in September, BP Chief Executive Tony Hayward said one or both of the men, who BP sources blamed for stoking hostilities between the partners, would likely leave the company.

"It's reasonable to expect that one or both of them will leave their positions," Hayward told Reuters in an interview at the time.

Hayward also said the appointment of the management team would be decided by the new CEO of TNK-BP. BP-appointed Bob Dudley agreed to step down as CEO as part of the peace deal.

However, Khan and Vekselberg's positions are being confirmed before a new CEO has been appointed. TNK-BP's Chief Operating Officer (COO) Tim Summers is currently acting CEO.

BP said it retains the right to nominate TNK-BP's CEO and COO under the deal, although these positions must be approved by TNK-BP's board of directors.

Also, AAR's insistence that the CEO should have substantial experience of working in Russia and Russian-language proficiency was conceded in September.

Odone denied the deal included significant new concessions. "If you look at the management board, it's pretty balanced," he said.

TNK-BP's management board is also being slimmed down under the agreement, to six members, including Khan and Vekselberg, from 13 members under Dudley.

Odone said a new TNK-BP CEO would be announced "in due course."