Russian Government Proposes that BP CEO Dudley Join Rosneft Board
Russia has offered BP CEO Bob Dudley a seat on the board of directors of state-controlled oil company Rosneft, in which BP is soon to raise its stake, a decree signed by Prime Minister Dmitry Medvedev showed on Friday.
State-owned Rosneft is buying TNK-BP for $55 billion from its 50-50 owners, BP and the private consortium AAR, in two separate deals.
BP will reinvest some of the cash proceeds of the deal to buy Rosneft shares from the Russian state, coming out with a stake of nearly 20%.
According to the terms of the agreement with Rosneft, BP would get two seats on the state-owned company's board once the deal is closed, as expected, in the first half of this year.
Igor Sechin, the head of Rosneft and long-standing ally of Russian President Vladimir Putin, said in January he would welcome Dudley on the company's board.
For Dudley, it would mark his return to the Russian corporate world after he left the country in 2008 amid a corporate dispute with AAR at TNK-BP, which he once headed.
Dudley, who has been steering BP though its most dramatic period marred by the Gulf of Mexico oil spill in 2010, will join the board of the Kremlin-controlled company, which is set to become the world's largest-listed crude producer after the TNK-BP deal.
As a Rosneft board member, the U.S.-born Dudley will have to work closely with Matthias Warnig, a former East German secret agent turned investment banker who has known Russian President Vladimir Putin since the 1990s.
Warnig was offered the option of retaining his non-executive seat on Rosneft's board, according to the decree that was published on the government web site.
Dudley and Sechin are already working together on an ad hoc committee that oversees Rosneft's takeover of TNK-BP, Russia's third-largest oil producer.
Both have been familiar with each other since Dudley's days in TNK-BP and have been closely cooperating after BP missed out on a deal with Rosneft to venture into the Russian Arctic, as a result of its feud with the AAR tycoons in 2011.
Back then, Sechin was Rosneft's chairman and oversaw the Russian energy sector in the government as deputy prime minister.
The Russian Prime Minister also nominated John Mack, former CEO and former chairman board of Morgan Stanley, currently a senior adviser at KKR, to join Rosneft's board.