TNK-BP Woes Might Send Dudley on Visa Run

APTNK-BP CEO Robert Dudley is among the staff who may have to leave the company's headquarters on the Arbat.
The future of TNK-BP's daily operations was thrown into doubt on Tuesday as officials inside the embattled firm warned that CEO Robert Dudley was among the foreign staff that might soon be forced to leave the country.

"There are chances that all the expats will have to leave within July," said a source inside the company, which is 50-50 owned by BP and four Russian billionaires.

The move could give effective control of the company to the Russian shareholders, who have been calling for Dudley's removal, arguing that he has run the company in BP's interest.

In a statement late Tuesday, Stan Polovets, chief executive of the Russian shareholders' holding, called the uproar over the visa issue "dramatics." He said that, while the Russian shareholders agreed that foreigners had a place in the firm, he supported the position that Russian companies should consider Russian employees over foreign ones.

"There are enough talented and experienced engineers and managers in Russia," Polovets said. "Such an approach is in total sync with the position of the Russian government."

Late last year, Vladimir Putin said in a speech before leaving the presidency to become prime minister that firms should boost the number of Russians in management.

"In our big, leading and today already global companies, mostly in the raw materials sector, you know that the thin layer of top management is mostly made up of foreign specialists," Putin said at the time.

The government has been keen to distance itself from the dispute, the outcome of which is being watched closely for a sign of how business will function under President Dmitry Medvedev, and several officials have insisted that it is "a normal shareholder dispute."

Authorities in Moscow last week refused Dudley's request to issue 150 work permits for TNK-BP's foreign employees, setting a quota of 71 instead. TNK-BP has appealed the decision to the Moscow agency involved — the Committee for Interregional Links and National Policies — and a hearing has been set for July 7, the company said.

Visas for foreigners employed directly by TNK-BP, including Dudley and chief financial officer James Owen, will expire over the course of July.

In an e-mail sent to foreign staff early Tuesday morning, Dudley warned that those expats whose visas expire over the next two weeks must "prepare to depart Russia to your home base before the expiry of your current visa and await further advice from the company," the Financial Times reported on its web site Tuesday.

Dudley, an American who has led TNK-BP since it was founded five years ago, wrote to his foreign staff, "We have now run out of time to remedy this situation by the end of July — or by the earlier expiry dates of some of your visas," the Financial Times said.

The process of receiving an expanded quota and renewing visas and work permits would take around six weeks, a source inside TNK-BP said.

"We are still hopeful," the source said. "The dialog with the authorities is not yet complete."

The Russian shareholders in TNK-BP — German Khan and Mikhail Fridman's Alfa Bank, Viktor Vekselberg's Renova and Len Blavatnik's Access Industries — have been locked in a fierce struggle with BP over control of the company, Russia's third-largest oil producer.

The Russian shareholders, known collectively as AAR after the initials of their investment vehicles, insist that they want to achieve parity in representing both sides' interests in the firm. BP has accused them of orchestrating a ploy to win control.

Both sides deny intending to sell their stakes in the firm, despite widespread market speculation about a deal that would see a state-run energy giant buy into TNK-BP.

The case that could see Dudley and senior foreign management leave Russia is separate from the troubles faced by 148 BP employees assigned to work at TNK-BP. Those employees, who received new visas and work permits in the spring, remain barred from working at TNK-BP because of a court injunction issued after a murky minority shareholder filed a suit challenging their right to work at the firm.

Sources inside the company blame both cases directly on Khan, an executive at TNK-BP tasked with government relations who has built a tough reputation.

A BP spokesman in London, commenting on the case of TNK-BP's direct employees, said, "We're obviously very disappointed that there was a process that TNK-BP management went through to try to get this sorted, that was interfered with by two shareholders in the company management."

Vekselberg attended the meeting with Moscow authorities on June 26 to discuss the quota issue, a source close to the company said.

In his e-mail to foreign staff on Tuesday, Dudley sounded a resigned note on the chances of success in the case of TNK-BP's direct employees.

"I hope that the visa and work-permit issues can be resolved satisfactorily in due course, although there is presently no clear indication of how, at what level, and by when such resolution may occur," he wrote, the Financial Times reported.