Empressr - ROSNEFT IS POISED TO BUY BP'S HOLDINGS IN RUSSIA
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Transcript of Empressr - ROSNEFT IS POISED TO BUY BP'S HOLDINGS IN RUSSIA
8ROSNEFT IS POISED
TO BUY BP'S
HOLDINGS IN RUSSIA
by: Gerard Lincoln
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BP HOLDINGS (HEADLINES)
Igor Sechin, chief executive of Rosneft, flew in to London for discussions on buying out BP's 50 per cent stake in TNK-BP in a deal that could be worth as much as £17.5billion for the FTSE 100 group.
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BP HOLDINGS (HEADLINES)
In what insiders described as "a fast-moving situation" and "a game of brinkmanship" Rosneft also looked
poised to buy the remaining stake held by BP's partner, the AAR consortium
controlled by a group of Russian billionaires.
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BP HOLDINGS (HEADLINES)
After years of friction between the two sides, both BP and AAR this year
signalled they could sell out of the partnership or seek full control.
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BP HOLDINGS (HEADLINES)
In a dramatic move last night AAR pulled out of the bidding to buy BP's
stake just hours before today's deadline.
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BP HOLDINGS (HEADLINES)
That paves the way for Rosneft to buy out both BP and AAR to gain control
of the highly profitable TNK-BP business and create the world's
largest oil company.
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BP HOLDINGS (HEADLINES)
BP has made it clear that it retains ambitions to remain in Russia and to expand in the Arctic
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BP HOLDINGS (HEADLINES)
As part of the deal BP is expected to take a 10 per cent stake in the
enlarged Russian business, giving it access to one of the world's most important oil-producing countries.
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BP HOLDINGS (HEADLINES)
AAR sources said the tycoons had decided not to bid because they had
been unable to raise sufficient finance in time and BP had
signalled it was not interested in their offer.
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BP HOLDINGS (HEADLINES)
Another major problem for AAR is that Rosneft had already secured backing
from a number of key banks who were unable to work with a rival
bidder.
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BP HOLDINGS (HEADLINES)
An alliance between the oligarchs and the Kremlin-backed company has always been seen as unlikely and
AAR made it clear that it would seek to sell its holding if Rosneft came on
board.
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BP HOLDINGS (HEADLINES)
Although TNK-BP has been very lucrative, generating £23billion in dividends after an initial investment of £5billion each in 2003, the two partners have always had a stormy relationship.
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BP HOLDINGS (HEADLINES)
In 2008 Bob Dudley, the then TNK-BP boss and now BP's chief executive,
was forced to leave Russia as tensions worsened.