TNK-BP's chief financial officer resigned Monday, saying a dispute between the company's British and Russian owners prevented him for fulfilling his duties.
The departure of James Owen deals a new blow to the BP-led management at TNK-BP and threatens to further undermine the stability of the company.
In a letter to TNK-BP chief executive Robert Dudley, Owen said the shareholder feud prevented him from working independently as his role required, TNK-BP said in a statement.
A source close to TNK-BP said Owen specifically felt that he could no longer trust the financial information he was being given.
"He's happy to do his job when he believes the data," said the source, who asked for anonymity because his comments diverged from TNK-BP's official position.
The source also said the company's previous chief financial officer, Kent Potter, resigned for similar reasons in 2005. The company said at the time that Potter had retired.
Owen was scheduled to retire by the end of the year, said another source close to TNK-BP, who requested anonymity because of the sensitivity of the issue. "The fact that he sped it up shows just how frustrated he was. … German tried everything possible to get him to delay it so they could figure out how to spin it," said the source, referring to German Khan, TNK-BP's executive director.
Khan, along with three other billionaire shareholders who co-own TNK-BP in the AAR consortium, have clashed with BP in recent months over the company's strategy and management. Shareholders also accused Dudley of discriminating against the company's Russian employees. Dudley left the country in July after not being able to renew his work visa and facing what he called "sustained harassment."
"Along with many others in TNK-BP, I greatly regret that we are losing Jim," Dudley said in response to Owen's resignation. "Our company's financial standing and internal governance processes have been greatly strengthened under his management, and he will be very hard to replace."
The second TNK-BP source said the resignation allowed AAR to move toward its "obvious objective" of controlling TNK-BP, whose ownership is currently evenly split between BP and the Russians.
The Russian co-owners expressed regret that Owen had left. "Jim Owen has made a significant contribution to the development of TNK-BP, and we regret to see him go," said Stan Polovets, chief executive of AAR. "During 2 1/2 years with the company, Jim has built a strong organization underneath him, and we expect to have a smooth transition as TNK-BP considers candidates for the CFO job. We wish Jim all the best as he pursues new endeavors."
Some analysts said the departure might indicate that BP is ready to make concessions to its Russian partners, who among other things are demanding a management shakeup.
With morale deteriorating among TNK-BP employees, the company is seeking to boost staff confidence with a series of advertisements, which started appearing in four newspapers Monday, said an official familiar with the thinking behind the ads. The ads, which tout TNK-BP's first-half results, are running in Rossiiskaya Gazeta, Vedomosti, Kommersant and The Moscow Times.
Last week, BP chief executive Tony Hayward and Mikhail Fridman, another AAR billionaire shareholder, held talks in Prague to resolve the dispute. However, the sides have so far only agreed on questions that need to be resolved.
Analysts have suggested that it is unlikely that the dispute will be resolved through negotiations without intervention from a court or the government.
A new CFO must be approved by TNK-BP's board of directors, the company said.
Given recent management disputes, the TNK-BP source said it was likely to take a long time to find a replacement.
Owen was one of the four executives who could stand in for Dudley in the event of an emergency, along with chief operating officer Timothy Summers, Khan and Viktor Vekselberg, Summers told reporters last month.
With the departure of Owen, "what you've got is the biggest two foxes now with an even freer rein to eat the chickens," said Peter Necarsulmer, chief executive of The PBN Company and a longstanding public affairs adviser to BP.
Peter Henshaw, a spokesman for TNK-BP, said he did not believe that the company's operations would suffer while the search was under way for a new CFO, noting that the company had gone for almost four months without a CFO before appointing Owen.
Owen's resignation will take effect at the end of August, TNK-BP said.
In related news, meanwhile, the Federal Migration Service said Monday that it had issued 66 work visas to TNK-BP's foreign employees, Interfax reported.
TNK-BP, however, said it has only received 40 work visas after submitting applications for 62.
The company currently employs 85 foreign employees, and all who do not receive work visas will have to leave, TNK-BP said.
The departure of James Owen deals a new blow to the BP-led management at TNK-BP and threatens to further undermine the stability of the company.
In a letter to TNK-BP chief executive Robert Dudley, Owen said the shareholder feud prevented him from working independently as his role required, TNK-BP said in a statement.
A source close to TNK-BP said Owen specifically felt that he could no longer trust the financial information he was being given.
"He's happy to do his job when he believes the data," said the source, who asked for anonymity because his comments diverged from TNK-BP's official position.
The source also said the company's previous chief financial officer, Kent Potter, resigned for similar reasons in 2005. The company said at the time that Potter had retired.
Owen was scheduled to retire by the end of the year, said another source close to TNK-BP, who requested anonymity because of the sensitivity of the issue. "The fact that he sped it up shows just how frustrated he was. … German tried everything possible to get him to delay it so they could figure out how to spin it," said the source, referring to German Khan, TNK-BP's executive director.
Khan, along with three other billionaire shareholders who co-own TNK-BP in the AAR consortium, have clashed with BP in recent months over the company's strategy and management. Shareholders also accused Dudley of discriminating against the company's Russian employees. Dudley left the country in July after not being able to renew his work visa and facing what he called "sustained harassment."
"Along with many others in TNK-BP, I greatly regret that we are losing Jim," Dudley said in response to Owen's resignation. "Our company's financial standing and internal governance processes have been greatly strengthened under his management, and he will be very hard to replace."
The second TNK-BP source said the resignation allowed AAR to move toward its "obvious objective" of controlling TNK-BP, whose ownership is currently evenly split between BP and the Russians.
The Russian co-owners expressed regret that Owen had left. "Jim Owen has made a significant contribution to the development of TNK-BP, and we regret to see him go," said Stan Polovets, chief executive of AAR. "During 2 1/2 years with the company, Jim has built a strong organization underneath him, and we expect to have a smooth transition as TNK-BP considers candidates for the CFO job. We wish Jim all the best as he pursues new endeavors."
Some analysts said the departure might indicate that BP is ready to make concessions to its Russian partners, who among other things are demanding a management shakeup.
With morale deteriorating among TNK-BP employees, the company is seeking to boost staff confidence with a series of advertisements, which started appearing in four newspapers Monday, said an official familiar with the thinking behind the ads. The ads, which tout TNK-BP's first-half results, are running in Rossiiskaya Gazeta, Vedomosti, Kommersant and The Moscow Times.
Last week, BP chief executive Tony Hayward and Mikhail Fridman, another AAR billionaire shareholder, held talks in Prague to resolve the dispute. However, the sides have so far only agreed on questions that need to be resolved.
Analysts have suggested that it is unlikely that the dispute will be resolved through negotiations without intervention from a court or the government.
A new CFO must be approved by TNK-BP's board of directors, the company said.
Given recent management disputes, the TNK-BP source said it was likely to take a long time to find a replacement.
Owen was one of the four executives who could stand in for Dudley in the event of an emergency, along with chief operating officer Timothy Summers, Khan and Viktor Vekselberg, Summers told reporters last month.
With the departure of Owen, "what you've got is the biggest two foxes now with an even freer rein to eat the chickens," said Peter Necarsulmer, chief executive of The PBN Company and a longstanding public affairs adviser to BP.
Peter Henshaw, a spokesman for TNK-BP, said he did not believe that the company's operations would suffer while the search was under way for a new CFO, noting that the company had gone for almost four months without a CFO before appointing Owen.
Owen's resignation will take effect at the end of August, TNK-BP said.
In related news, meanwhile, the Federal Migration Service said Monday that it had issued 66 work visas to TNK-BP's foreign employees, Interfax reported.
TNK-BP, however, said it has only received 40 work visas after submitting applications for 62.
The company currently employs 85 foreign employees, and all who do not receive work visas will have to leave, TNK-BP said.
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