TNK-BP Russian partners seek offer from BP on Rosneft deal

15th April 2011, Comments 0 comments

BP's Russian partners in TNK-BP said Friday that they were awaiting proposals from BP over its stalled Rosneft deal and denied plans to exit the British oil giant's local joint venture.

The statement came as a landmark agreement between BP and Russian oil giant Rosneft on a $16 billion share swap and joint exploration of the country's Arctic shelf has come to a halt following a protest by BP's Russian partners in TNK-BP.

BP's chief executive Robert Dudley was meeting Rosneft president Eduard Khudainatov for talks in Moscow on Friday, the Interfax news agency reported, adding that BP confirmed Dudley was in Moscow but did not elaborate on his programme.

The two oil companies on Thursday extended the original deadline to complete the share swap to May 16 in an attempt to resolve a conflict with Alfa-Access-Renova (AAR), the group of billionaires who make up the Russian half of TNK-BP.

"We trust that BP will use the extension it has got from Rosneft to ensure that both the Arctic opportunity and the Share Swap are pursued through a structure consistent with BP's obligations under the TNK-BP shareholder agreement," AAR's CEO Stan Polovets said in a statement sent to AFP.

Under the stalled agreement, Rosneft was to take a 5.0 percent stake in BP with the British company taking 9.5 percent in the Russian firm, and create a joint venture for Russia's Arctic shelf exploration.

The agreement, signed earlier this year, was hailed as a breakthrough for foreign investment in Russia and also a comeback for BP after the costly public relations nightmare of the 2010 Gulf of Mexico oil spill.

However AAR objected that the deal violated their shareholder pact with BP and a Stockholm arbitration court ruled in their favor last month, blocking the deal.

"AAR is a longterm strategic investor in TNK-BP and has no plans to exit. Now is the time for sensible proposals from BP to resolve the problems that have been created," AAR's CEO Stan Polovets said in a statement sent to AFP.

Vedomosti daily reported Friday that AAR is now asking for $40 billion for its share in TNK-BP, citing sources.

AAR was reported earlier this week by Dow Jones as having rejected a $27 billion buyout offer from BP.

The seeming impasse is a risk for BP as both Rosneft and TNK-BP have threatened to sue the British firm, already crippled by the bill for last year's oil spill.

© 2011 AFP

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