Kremlin eyes BP’s £16bn stake in oil joint venture

By MARTIN FLANAGAN
Published on 25/07/2012 00:00

THE Kremlin broke cover yesterday with a move to snap up BP’s $25 billion (£16bn) stake in its Russian joint venture TNK-BP after state-owned Rosneft said it was starting talks with the British oil major.

Such a sale would be a final dramatic twist in the saga of BP’s troubled but lucrative Russian presence. It was the opposition of the British group’s existing j/v partners to a planned $16bn Arctic exploration tie-up between BP and Rosneft that sparked acrimony and legal actions.

The collapse of the relationship between BP and AAR, the four oligarchs who own the other half of TNK-BP, led the UK oil giant to put its 50 per cent stake up for sale last month.

Rosneft chief executive Igor Sechin said in a statement yesterday: “Rosneft has an established expertise and track record in managing large assets and considers the potential acquisition of BP’s participation in TNK-BP to be an attractive commercial proposition.

“The potential acquisition would complement its existing portfolio and create value for all stakeholders.” Rosneft said it had signed a non-disclosure agreement with BP.

AAR has also said it is interested in buying half of the British oil major’s stake in TNK-BP, saying last week it would be willing to pay $10bn.

The money-spinning TNK-BP has paid BP $19bn in dividends since 2003. BP said yesterday that while conducting talks with Rosneft and any other interested parties, it would also negotiate in good faith with AAR.

Analysts said a deal with state-controlled Rosneft would be good for BP in that it would gain cash and possible access to other major Russian oil projects. One said: “It [BP] would still be in the Russia game, but with a cash payout and rid of its troublesome partners. A bit like getting a divorce and then marrying the judge”.