London court puts brakes on BP-Rosneft deal

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The High Court in London on Tuesday granted a request by the Russian shareholders in TNK-BP Holding an injunction to halt a major exploration tie-up between BP and Rosneft.

Russian shareholders of Russian-British joint venture TNK-BP last month filed a complaint with the court seeking to block the planned milestone deal between troubled British energy giant BP and its Russian peer Rosneft.

The case will now be go to arbitration, BP said in a statement.

"It has always been BP's position that these matters should be resolved through arbitration, and we are pleased that this is what the court has now decided," BP's head for Russia, David Peattie, said in the statement.

Following a hearing at the High Court on Tuesday, the judge said the companies "had sensibly reached an agreement" for an injunction to be placed on BP blocking any further progress on the landmark deal until February 25, or the determination of the arbitration tribunal.

BP and Rosneft had in January agreed to form a joint venture for Arctic oil exploration and take a cross-shareholding in one of the biggest ever tie-ups between a Russian and Western company.

TNK-BP is jointly owned 50 percent by BP and 50 percent by its Russian shareholders -- a consortium of three Russian businessmen including billionaire banker Mikhail Fridman.

Under the terms of the deal signed in London earlier this month, Rosneft will hold five percent of BP's ordinary voting shares in exchange for approximately 9.5 percent of Rosneft's shares.

BP and Rosneft will also explore and develop the Russian firm's three licensed blocks on the Arctic continental shelf -- 125,000 square kilometres, said to contain five billion tonnes of oil and 3.0 trillion cubic metres of gas.

-- Dow Jones Newswires contributed to this story --

© 2011 AFP

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