TNK-BP Finds Third Executive

March 20, 2009

TNK-BP now has a third Executive Director — former BP employee Didier Baudrand, who will be responsible for Downstream. Until now, the only Executive Directors in the company have been its Russian shareholders Viktor Vekselberg and German Khan. Mr.Baudrand will become the fifth member of TNK-BP’s Management Board, and his appointment virtually completes the formation of that management body. The sole remaining position to be filled is head of TNK-BP.

TNK-BP yesterday announced the appointment of a new senior manager, whose responsibilities will cover refining, trading and marketing: former BP man Didier Baudrand has been appointed Executive Director. In the past, Baudrand worked as Senior Vice President Special Projects in BP Downstream, in BP’s joint venture with Sinopec in China, and in France and England. From the time of its creation in 2003 until last Autumn TNK-BP’s Downstream operations were overseen by another former BP employee, Antony Considine.

TNK-BP’s management structure allows for several executive directors. These are Level 2 managers, immediately below the CEO (Level 3 -Vice Presidents). Mr.Baudrand will become TNK-BP’s third Executive Director:  company shareholders Viktor Vekselberg and German Khan already hold similar positions. Until now, no employee managers have ever been made executive directors in TNK-BP. Sources inside TNK-BP say that Baudrand will also become a member of the company’s Management Board. Together with Acting CEO Tim Summers, who is responsible for Upstream, the new senior executive will represent the British side in the Management Board, according to BP.

TNK-BP is the third-largest oil company in Russia and is controlled equally by UK company BP and the AAR consortium of Russian shareholders. Early last year a conflict broke out between them over the company’s governance principles. By September, however, a settlement had been reached. One of the agreed principles was equal shareholder representation in the Management Board.

The Russian side is represented in the Management Board by Vekselberg and Khan, and the fifth – independent – member will be TNK-BP’s Chief Finance Officer Jonathan Muir. Muir has been Acting CFO since August 2009, having worked in TNK-BP since 2003 and before that in its subsidiary SIDANCO, which he joined from Ernst & Young. The sixth and last seat on the Management Board is for TNK-BP’s future new CEO.

“The composition of the Management Board shows that the contradictions in TNK-BP’s management structure have indeed been resolved”, says Konstantin Cherepanov from KIT Finans, adding that the new membership is in line with the principles laid down in the shareholder agreement: equal shareholder representation and independent managers. At the same time, adds Mikhail Zanozin from FK Uralsib, the key question of who will lead the company is still open. The British side is supposed to nominate a candidate for CEO. BP yesterday clarified that the list of candidates for the position is still being finalized. Tim Summer’s authorities as acting head of the company have been extended to 1 st June. Until the beginning of the year one of the top candidates for CEO was considered to be the ex-CEO of Nornickel Denis Morozov. However, according to Kommersant sources, he is no longer the key candidate, as other managers are also being considered.

- Kommersant