MOSCOW, Russia -- BP and Alfa Access-Renova (AAR), the two main owners of TNK-BP, have agreed in principle to an overhaul of the company's governance structure.
A memorandum of understanding (MOU) signed today and due to be finalized in detail over the coming months, calls for the re-structuring of the TNK-BP board through the appointment of three new directors independent of either side, the companies say.
The MOU also includes an option to sell up to 20% of a subsidiary of TNK-BP through an initial public offering (IPO) on the international financial markets at an appropriate future point, subject to the consent of the Russian authorities.
The MOU also includes the appointment of a new independent chief executive nominated by BP and approved by the TNK-BP board. The management committee, responsible for running operations, will be reduced significantly from the current 14 members and will include the chief executive, CEO, CFO, and an executive director.
The main board of TNK-BP will be adjusted in size to four representatives each from BP and AAR, together with the three new independent directors not affiliated to either side. The company will continue to operate under English law.
Current Chief Executive Bob Dudley will step down before the end of the year.