Putin open to idea of TNK-BP joining Rosneft

4th March 2011, Comments 0 comments

Prime Minister Vladimir Putin said Friday he was open to the idea of the Russian-British joint venture TNK-BP taking part in joint Arctic exploration projects with Russia's biggest oil firm Rosneft.

Putin's comments came only hours after TNK-BP confirmed that it was looking to take the British oil giant BP's place in its strategic alliance with state-held Rosneft.

The Russian owners of the joint venture believe the deal violates the TNK-BP shareholders agreement and have tried to block it in a London court.

Putin said Friday that he would not personally get involved in the high-stakes dispute.

But Russia's former president said TNK-BP had a right to voice an interest in Arctic exploration projects.

"We have adopted a law that entrusts (Arctic) shelf work to Rosneft and Gazprom," news agencies quoted Putin as saying.

"If TNK offers one of these companies suitable conditions, then why not? Of course," Putin added.

Various Western press reports said that TNK-BP's management was willing to pay BP $7.6 billion in cash for its place in the $16 billion Rosneft share-swap and Arctic exploration agreement.

But the Financial Times reported this week that Rosneft had a sceptical view of the joint venture's attempt to take BP's place in the deal.

TNK-BP -- which is Russia's third-largest oil producer and one of the world's 10 biggest private oil firms -- said it will hold a board meeting in Paris on March 12 to discuss management's proposal.

"We hope that the next board of directors meeting will support the management's recommendation and that TNK-BP's management will be authorised to start negotiations with BP and Rosneft to participate in the Arctic deal and share swap." Chief Executive Officer Mikhail Fridman said in a statement.

January's agreement gives Rosneft five percent of BP's ordinary voting shares in exchange for approximately 9.5 percent of Rosneft's stock.

BP and Rosneft also agreed to explore and develop Rosneft's three licensed blocks on the Arctic continental shelf -- a 125,000 square kilometre (50 square mile) region said to contain five billion tonnes of oil and 3.0 trillion cubic metres of gas.

© 2011 AFP

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