A formal agreement to end BP’s acrimonious dispute with its Russian joint venture partners was signed today, bringing into force a new corporate governance structure for TNK-BP and the prospect of a public offering of a fifth of the affiliate’s share capital.

The row between BP and Alfa-Access-Renova, a consortium of Russian tycoons who own half of TNK-BP, was patched up in August when BP yielded to the partners demand that Bob Dudley, BP’s nominated chief executive, be removed from his job. Mr Dudley left Moscow after BP’s partners mounted a campaign of abuse and semi-official harassment, accusing him of discriminating against Russian staff.

In the course of the dispute, expatriate staff lost their work permits and were denied access to the TNK-BP headquarters as both sides engaged in a high-profile public relations battle and which precipitated a sell-off by foreign investors in the Russian stock market.

Peter Sutherland, BP’s chairman, said the agreement would align the two sides around a shared agenda for value growth and would relieve recent tensions.

The memorandum of understanding, signed today, envisages a new independent chief executive will be appointed on BP’s nomination. The TNK-BP board will include three new independent directors and the management committee will be reduced in size from 14 members to include the chief executive, chief operating officer, chief financial officer and executive director.

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