Anglo-Russian oil firm TNK-BP Ltd. said Monday that Russian billionaire Mikhail Fridman has resigned from his position as chief executive officer of the company. Fridman's resignation signals the broadening rift between British energy giant BP plc (BP,BP_UN.TO,BP.L) and its Russian partners in the joint venture.
TNK-BP, the third largest oil company in Russia, is a 50:50 joint venture company formed by BP and Alfa-Access-Renova or AAR consortium, consisting of a group of Russian billionaires. Fridman is one of the AAR group of billionaires.
TNK-BP also said that Fridman informed of his decision to resign from the position of chairman of the board of TNK-BP Management, a subsidiary of TNK-BP Group that manages the company's assets in Russia and Ukraine. Fridman's resignation from both positions will take effect in 30 days.
Following Fridman's resignation, TNK-BP will be managed by a group of executives who hold powers of attorney related to their areas of responsibility. AAR shareholders German Khan and Victor Vekselberg will remain with TNK-BP as executive directors and members of the management board.
Fridman's resignation comes more than a year before his term was slated to end in 2013. It also comes less than a week after TNK-BP canceled a board meeting scheduled for May 25 due to a lack of quorum. In addition, the company was unable to take a decision on declaring dividends for the first quarter of 2012.
Differences between BP and AAR have prevented TNK-BP from appointing a director to its board following the resignation of two independent directors in late 2011.
AAR reportedly said that it has lost faith in BP as a partner and the joint venture appears to have run its course.
However, BP said that Fridman's resignation will have no impact on TNK-BP's day-to-day operations as his role has largely been ceremonial.
BP and AAR have been at loggerheads over corporate governance at TNK-BP ever since the company was formed in 2003. BP's current CEO Bob Dudley was forced out as CEO of TNK-BP in 2008 amid tensions between BP and AAR.
The relationship between the two shareholders soured last year after a deal between Russia's state-owned oil company OAO Rosneft and BP to jointly develop Russia's Arctic collapsed in May 2011 following a legal challenge from AAR.
Arbitration proceedings are continuing into whether the Rosneft deal by BP violated an exclusivity clause in the TNK-BP shareholder agreement.
BP closed Friday's trading on the NYSE at $38.36, up $0.13 or 0.34 percent on a volume of 5.10 million shares.
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