2 years after fleeing Russia in the midst of a shareholder dispute between BP and its AAR joint Venture partners at TNK-BP, former TNK-BP head has been tapped to take over the reins at BP.

Robert Dudley has already won plaudits for his handling of the Gulf of Mexico oil spill cleanup. His familiarity with the Gulf region – home to a third of BP’s production – has made him a step forward for US political perception of BP’s efforts, and it comes on top of his extensive background in Russia’s oil sector, where TNK-BP generates about a quarter of its revenues.

His experience as head of TNK-BP, which involved the overhaul of Russian operations, both upstream and downstream will stand him in good stead in heading up BP. Despite the long running management dispute he had with the AAR consortium which represents TNK-BP’s Russian shareholders, which ultimately saw him leave the country, Russia is likely to remain central to BP’s strategy – with analysts dismissing media reports that the company could sell a stake in TNK – BP, possibly, to Gazprom or Rosneft.

TNK – BP is a cash generator. On an original investment of $7 billion in 2003, BP has already seen $12 billion in dividends. Metropol Oil and Gas analyst, Alexander Nazarov, says that alone, plus the fact it makes up about 20% of BP’s global production, makes it unlikely that BP would consider selling, while it is focusing on cash generation in the wake of record 2Q 2010 losses of $17 billion.

“Officially for the last year TNK-BP reported for more than $35 billion in revenues. And taken stand alone, TNK-BP is the largest BP subsidiary in terms of revenues and probably in terms of EBITDA, and net profit. And of course, TNK-BP is one of cash sources for BP. So, obviously, cash generation, now for BP, is one of the primary targets.”

Competitors are lining up to consider what BP needs to sell in order to shore up its finances. It has confirmed that is looking to sell off assets, on top of its recently announced deal to sell $7 billion in North American and Egyptian assets to Apache. ExxonMobile and Chevron are both believed to be in talks. But Christine Tiscareno, Crude oil & natural gas equity analyst at Standard & Poor's Equity Research says the first priority is to stem the leak from the Transocean- Macondo disaster, which is already believed to have cost the company something in the order of $30 billion.

“First task to begin with is to plug the well – that’s still not done yet. We are still 2-3 weeks away from that. Even though the spill has now been contained, it has not been plugged. So the first order of things is to get the plug done. Second is to figure out how the reimbursements are going to be done. And then it’s a question of reconstructing and winning back the trust of the American people.”

Dudley’s appointment will go some way to regaining the trust of the US, with the announcement of his appointment as incoming CEO renewing his commitment to those hit hardest by the oil spill disaster.

"In this change of roles, I particularly want the people of the Gulf Coast to know that my commitment to remediation and restitution in the region is not lessened. I gave a promise to make it right and I will keep that promise."

His experiences in Russia, which saw him depart Moscow claiming harassment from security services and tax authorities, as well as having issues with visas for BP specialists seconded to its Russian joint venture, will provide an interesting counterpoint now that he is the CEO of BP. The AAR consortium, which resolved its issues with BP over the management of TNK-BP, and now has an agreed management strategy, has backed Dudley’s appointment as BP CEO. It has also supported the mooted appointment of Dudley’s predecessor, Tony Hayward, to a non executive director position with TNK-BP, and expressed interest in buying BP assets.