Time running out for BP’s alliance with Rosneft

By ROB DAVIES FOR THE DAILY MAIL
Updated:

BP is fast running out of time to save its Russian alliance with Rosneft after the Kremlin-backed firm refused to extend today’s deadline to complete the £10billion share swap.

The deal has been hanging by a thread since TNK-BP won an injunction blocking the tie-up because it contravened their contract with BP. And despite earlier suggestions that BP and rosneft might buy out AAR – which owns 50 per cent of TNK-BP – talks have ground to a halt.

Rosneft is also believed to have told investors that it is seeking another partner, with Shell and France’s Total touted as alternatives to BP.

Russian marriage? A statement by AAR hinted that the deal could be salvaged, if BP can offer something substantial

Russian marriage? A statement by AAR hinted that the deal could be salvaged, if BP can offer something substantial

A source close to the situation said: ‘I think BP has blown it sadly,’ adding that the firm was ‘trying to blame everybody else’ ahead of today’s annual meeting, at which it is expected to face investor fury.

If no agreement can be reached by the end of today, BP could find itself facing a lawsuit from Rosneft, for failing to inform it that TNK-BP had right of first refusal on any new venture in Russia.

 

More...

A fresh suit would add to one launched by TNK-BP earlier this week and piles more misery on chief executive Bob Dudley, who hoped to make the Rosneft alliance his first strategic success. 

It is now unclear what BP (up 2.85p to 464.2p) could use to coax AAR into keeping the deal alive, although it may make a lastditch offer of lucrative assets in return for the oligarchs’ blessing.

A statement by AAR hinted that the deal could be salvaged, if BP can offer something substantial. ‘It is up to BP to make a sensible proposal to get out of the mess it has created. One has not been forthcoming,’ it said.

The collapse of its prospective Russian marriage would complete a year of misery for BP, as it approaches the 12-month anniversary of the Deepwater crisis.

The disaster killed 11 people, triggered the worst accidental oil spill in US history and has cost BP tens of billions of dollars so far.

Most watched Money videos