London/Moscow - Energy giant British Petroleum (BP) has moved to resolve its long-standing dispute with Russia over the TNK-BP joint venture and said controversial chief financial manager Robert Dudley would leave his post by the end of the year.

BP said it had agreed to a memorandum of understanding that envisaged the restructuring of the TNK-BP board through the appointment of three new directors independent of either side of TNK-BP's two principal owners, BP and Alfa Access-Renova (AAR).

The aim was to "better align their respective interests and improve the transparency if TNK-BP's equity."

BP chief financial manager Dudley, who fled Moscow in July claiming he was being harassed by Russian shareholders, would step down before the end of the year, the statement said.

The memorandum, which BP said would be signed Thursday, also includes the option to sell up to 20 per cent of a subsidiary of TNK-BP through an initial public offering on the international financial markets "at an appropriate future point."

Shareholders at TNK-BP, Russia's third-largest producer, have been locked in a dispute over Dudley since last year, demanding his replacement.

BP Thursday described the agreement as a "sensible means of resolving a situation that could not continue without causing serious damage to what has been an immensely successful joint venture for all concerned." (dpa)