BP said Thursday an overhaul of the governance structure TNK-BP has been agreed in principle by the two main owners, BP and Alfa Access-Renova (AAR).
The aim is to better align their respective interests and improve the transparency of TNK-BP's equity, the company said.
TNK-BP chief executive Bob Dudley will step down before the end of the year.
The company said a memorandum of understanding, signed Thursday and due to be finalised in detail over the coming months, envisages the appointment of a new independent chief executive nominated by BP and approved by the TNK-BP board.
A re-structuring of the TNK-BP board through the appointment of three new directors independent of either side is also proposed.
The MOU also includes an option to sell up to 20% of a subsidiary of TNK-BP through an initial public offering on the international financial markets at an appropriate future point, subject to the consent of the Russian authorities.
BP said TNK-BP's management committee will be reduced significantly from the current 14 members and will include the chief executive, the chief operating officer, the chief financial officer and an executive director.
The main board of TNK-BP will be adjusted in size to four representatives each from BP and AAR, together with the three new independent directors not affiliated to either side.
The company will continue to operate under English law.
In nominating Dudley's replacement, BP will offer a Russian-speaking candidate with extensive Russian business experience.