Russian exit may set BP shareholders up for £10bn windfall

Shareholders in BP could be in line for a £10 billion windfall if the oil major can agree an exit for its Russian joint venture.

The 50 per cent stake in TNK-BP was put on the block last week after the UK group said it had received unsolicited approaches for the holding. City analysts believe the sale could be worth between $25bn (£16bn) and $35bn.

According to reports yesterday, one top-ten shareholder has been told that half the money will be set aside for new assets with the rest given back to investors.

BP’s existing partner in the joint venture, the Alfa-Access-Renova (AAR) group of Russian oligarchs, is likely to have made one of the approaches for the TNK-BP stake, though the Kremlin has also emerged as a surprise potential bidder.

It is thought that Rosneftegaz, the state holding company chaired by Igor Sechin, one of president Vladimir Putin’s most trusted lieutenants, has made an approach as part of a mandate to consolidate state control over oil and gas.

TNK-BP is the third-biggest oil producer in Russia behind Rosneft, which the state controls, and second-placed Lukoil, which is owned by Russian investors.

The business accounted for more than quarter of BP’s production and 90 per cent of its 2011 dividend.

Last Monday, one of the AAR billionaires, Mikhail Fridman, quit as chief executive of TNK-BP, blaming a breakdown in relations with the energy giant.

The British group invested almost $8bn in cash, shares and assets to form the joint venture. However, relationships between the partners have soured. In 2008, BP chief executive Bob Dudley, then chief executive of the joint venture, fled Russia amid what he described as sustained harassment by AAR.

BP offered to buy out AAR for about $32bn last year, sources said at the time, following a boardroom row over BP’s abortive move to seal an Arctic exploration deal with Rosneft.

The deal collapsed amid legal opposition from AAR, which cited the TNK-BP agreement that forces BP to use the latter as its vehicle for expansion in Russia.

A share buy-back or special dividend would be some reward for the patience of BP investors, who saw dividends suspended after the Gulf of Mexico disaster and later reinstated at half the pre-spill value.

Shares closed on Friday at 402p, up 7p but still more than a third below the level seen prior to the disaster in 2010.

BP’s disclosure last week noted that it had received “unsolicited indications of interest” regarding the potential acquisition of its stake in TNK-BP.

“In light of these unsolicited approaches and consistent with its commitment to maximising shareholder value, and its obligations under the shareholder agreement, BP has notified AAR of its intention to pursue a potential sale,” it added.

The group appears to have ruled out a partial disposal. One source close to the company is reported to have said: “We have no interest in being a minority investor”.

BP is the third-biggest company in the FTSE 100, with a market value of some £76.5bn.