rosneft denies approach to bp over tnkbp
Last Updated : GMT 10:30:02
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Rosneft denies approach to BP over TNK-BP

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Arab Today, arab today Rosneft denies approach to BP over TNK-BP

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Russia’s largest state-controlled oil company Rosneft denied having ever given consideration to buying out BP’s 50 percent stake in its TNK-BP joint venture in Russia, Rosneft President Igor Sechin said on Friday. “We never thought about that. This is a new situation developing on the market. It seems there might be a reaction to this statement on the market,” Sechin said, adding the news should be studied first before a final decision was made. “It [the market] should at first formulate definite proposals. This is a very unforgiving business to make predictions, when the situation has not developed in full. We should wait for a while,” Sechin said. BP announced on Friday in a statement on its website that it had received unsolicited interest regarding the potential acquisition of its shareholding in TNK-BP, and that it was looking to move forward in response. “In light of these unsolicited approaches and consistent with its commitment to maximizing shareholder value, and its obligations under the Shareholder Agreement, BP has notified Alfa Access Renova of its intention to pursue a potential sale.” The announcement brings one step closer the breakup of the 50-50 partnership between BP and Alfa Access Renova, which saw TNK-BP formed in 2003 BP’s Russian oil and gas assets and the oil and gas assets of Alfa Access Renova. Vyacheslav Bunkov, head of oil and gas at Aton investment group, said the BP stake would be worth as much as the price was being floated in early 2011, when BP considered buying out AAR. “I think $30-35 billion price is what we are looking at, same as it was when buyout talk has circulated earlier,\" he said. The partnership has been beset by strategic management issues in recent years, with former TNK-BP CEO Robert Dudley forced out of Russia in 2007, before subsequently becoming CEO of BP.  The aftermath of the dispute, which involved claims that BP was running TNK-BP as a subsidiary and that it was refusing to allow TNK-BP to compete in international markets, was a revised shareholder agreement, flagging a commitment to an IPO over the longer term, and greater international presence for TNK-BP. In January 2011 a proposed joint venture between BP and Rosneft to develop Russian Arctic energy interests, and a proposed share swap between BP and Rosneft, was ultimately abandoned after AAR took BP through arbitration claiming that the TNK-BP shareholder agreement gave TNK-BP the first right of refusal on any proposed BP projects in Russia - a position, which was ultimately upheld. The BP announcement comes after TNK-BP CEO Mikhail Fridman announced his resignation earlier this week, with AAR CEO Stan Polovets saying that the time had come for a review of the 50-50 ownership structure of TNK-BP.  In addition to its Russian assets TNK-BP has production assets in Ukraine, Brazil, Venezuela and Vietnam. Russian experts polled by RIA Novosti said the price of BP\'s stake was likely to be the main stumbling block during possible talks between the two shareholders. \"It is known that AAR and BP are not satisfied with the size of their stakes and [the disputes] have retarded the company\'s operational activities. BP values its stake highly and will not sell it at a cheap price,\" Troika Dialog investment company analyst Valery Nesterov said. \"The price question has been always one the most important,\" VTB Capital analyst Alexander Kirevnin said. \"TNK-BP generates considerable income for BP. If BP sells this asset, this step could considerably worsen the company\'s operational results and it would be very difficult to reinvest the funds [gained from the stake sale] in other projects with comparable yield,\" he added.

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