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BP Nears Deal to Sell TNK-BP Stake
Keywords:
Tags: Current Focus, Oil & Gas, Russia,
With Putin now president and putting his support behind Rosneft CEO, Igor Sechin, and the idea of building Rosneft into a large state owned company that champion's Russian interests, the deal to buy BP's stake in the TNK-BP joint venture is more likely to succeed. Earlier efforts in mid 2011 for Rosneft to buy BP's stake stumbled, with president Medvedev pushing in the other direction for a smaller state control of industrial assets in Russia, and calling for political leaders like Mr. Sechin to give up corporate positions. It appears that Putin is now convinced that this is the right direction for Russia. Under the proposed agreement Rosneft would value BP's stake at $25 billion, half of this in cash and half in the form of Rosneft shares, making BP a part owner of Rosneft with 10-15% of Rosneft shares, and potentially a partner for future projects providing access to western technology. The 2011 deal valued this stake at $32 billion. For BP it provides a more reliable partner after its troubled relationship with the AAR group, the 50% owner of the BP-TNK venture, with no majority control for either partner and AAR's political influence leading to many conflicts.
Problems with 50-50 merger of equals or 50-50 ownership and co-CEO arrangements
05/30/2008
Examples of such 50-50 merger or venture arrangements include the BP-TNK venture, which president Putin says he warned against because no one is in charge. The problem of diffeent cultures acts as an added problem.
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BP Nears Deal to Sell TNK-BP Stake
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Grouped Articles
BP Nears Deal to Sell TNK-BP Stake
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Wall Street Journal 10/23/2012
Rosneft CEO Sechin Enters Spotlight After BP Deal
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Russia and China in Major Natural-Gas Supply Pact
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BP's sale of its stake in TNK-BP to Rosneft and a new start in Russia
10/18/2012
The Rosneft acquisition of TNK-BP ends a fractured relationship for BP with a difficult partner. BP starts a new relationship with Rosneft, and opportunities to pursue new deals in Russia. For Rosneft the acquisition makes it the world's largest oil company with a need for western technology from BP.
Linked Articles
BP's Russia Dance Reaps a Poor Dividend
Wall Street Journal 10/23/2012
BP Nears Deal to Sell TNK-BP Stake
Wall Street Journal 10/18/2012
Russian president Putin and BP's 20% stake in Rosneft
10/18/2012
Putin sees the larger British ownership stake in Rosneft a offering more stability to the company. This also provides Russia with a reliable partner on other projects and access to new technology. Putin defended the deal for Rosneft to acquire TNK-BP because of the endless conflicts between the partners, which he says he warned against at the outset. He pointed to the 50-50 ownership arrangement in TNK-BP as inherently unstable leaving no one in control.
Linked Articles
Moscow Had 'Mixed Feelings' on TNK-BP Deal, Putin Says
Wall Street Journal 10/25/2012
BP Nears Deal to Sell TNK-BP Stake
Wall Street Journal 10/18/2012
Russian president Putin and the Rosneft-BP deal
10/18/2012
An effort by Putin to end the shareholder conflict inherent in the 50-50 TNK-BP joint venture which he says he warned about in the beginning.
Linked Articles
Moscow Had 'Mixed Feelings' on TNK-BP Deal, Putin Says
Wall Street Journal 10/25/2012
BP Nears Deal to Sell TNK-BP Stake
Wall Street Journal 10/18/2012
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