I wasn't proposing to attack BP - ex TNK-BP deputy CEO

MOSCOW Fri Nov 25, 2011 2:26pm GMT

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MOSCOW (Reuters) - The former deputy CEO of TNK-BP, caught between co-owner BP Plc (BP.L) and its local partners as they thrash out differences over BP's attempt to tie up with rival Rosneft (ROSN.MM), said he never advocated suing the British major for damages.

In an interview, Maxim Barsky, who was in charge of operational management of Russia's No.3 oil firm, rebutted suggestions he had called for legal action just before his departure on November 1, since when often-rocky shareholder relations have quietened.

"I wrote to the shareholders and said, 'Meet to decide who is joining and who is not'," Barsky told Reuters, referring to a letter he wrote to directors calling for a meeting to consider legal action.

"It was not a proposal to attack BP. I had the authority to call board meetings and shareholder meetings, and the letter was technical in form."

BP's failed share swap and Arctic drilling deal with state-controlled Rosneft is under scrutiny by an arbitration panel in London for what the co-owners of TNK-BP claim are breaches of their shareholder agreement.

The four Soviet-born billionaires who share control of TNK-BP with the British major say BP should have offered the deal to TNK-BP. BP and Rosneft failed in a last ditch effort to save their deal with a $31 billion (20 billion pound) buyout offer.

The board meeting called in Barsky's letter -- which was to consider legal action against BP in Britain and the joint venture's home jurisdiction, the British Virgin Islands -- has not been held.

Since the letter became public in late October, two lawsuits filed by a minority shareholder in TNK-BP seeking nearly $16 billion in damages over the failed BP-Rosneft deal have been thrown out by a Russian court.

Before the suits were dismissed, BP complained that the operating unit of TNK-BP had gone to court in support of one of the suits, in a breach of corporate governance.

The British major had insisted a decision on a major lawsuit was the prerogative of TNK-BP's top board.

BP's pushback has been followed by a period of relative calm in the shareholder relationship surrounding TNK-BP, leaving the focus on arbitration to determine whether BP violated the shareholder pact and is liable to damages as a result.

HARDEST JOB

Barsky left the company after nearly a year in limbo when his planned ascent to the CEO's chair was repeatedly put off by the board.

A businessman and founder of a mid-sized oil producer, West Siberian Resources, Barsky, 37, was appointed as an eventual successor to Bob Dudley, now BP chief, after the latter was ousted from TNK-BP in an earlier conflict between the shareholders.

"I am not upset at having to leave. I am completely happy. It's not an act, it's true, because this isn't a great happiness. You remember what Bob Dudley said: Being CEO of TNK-BP is the hardest job in the world," he said.

Mikhail Fridman, one of BP's partners in the 50-50 joint venture and the head of the Alfa Group industrial consortium, appointed interim CEO after Dudley left, is now expected to remain CEO until the end of 2013.

That two-year period will be needed, said Barsky. "That's a realistic amount of time to find a new CEO. They have looked for one before and they know how much time it takes," he said, adding an internal candidate may be found.

"As long as the shareholders are sitting in the company, they exert an enormous influence on it," Barsky said.

"They were ready to leave their posts at the company if BP nominated me as CEO. We had talked it all through with German (Khan, Fridman's partner at Alfa), and it was a reality. But BP did not put my candidacy on the agenda."

Despite heavy media focus on the shareholder conflict, however, Barsky denied that the company's day-to-day management was politicised by the shareholders.

"It is managed by top-level managers. The head of upstream, Alex Dodds, is nobody's man. That was my goal: find someone who would be nobody's man. He is from Exxon. He doesn't care about BP or AAR. He has a goal: production. And he manages it."

Barsky led TNK-BP's push into foreign markets, buying BP's stakes in ventures in Vietnam and Venezuela as the British major shed assets to finance damages from the Macondo disaster in the Gulf of Mexico, and negotiating an upstream deal in Brazil.

The board has given management permission to expand in only three countries, but Barsky said the portfolio of foreign assets could serve as a base for expansion in those new markets. The company is looking at a new licensing round in Vietnam.

"TNK-BP's (Russian) portfolio is the most difficult among all the big Russian oil companies. It's made up of old fields ... and 70 percent are in Western Siberia, where the economics would be zero without changes to the tax regime," Barsky said.

"And they have to replace them with more efficient fields. In Brazil profit per barrel is three times higher than in Russia."

(Editing by Douglas Busvine and David Holmes)

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