Russia state oil company OAO Rosneft announced its interest in acquiring oil major BP’s 50-per-cent stake in TNK-BP, its Russian joint venture, in a move that could shake up Russia’s oil industry and increase Rosneft’s already hegemonic role.
Igor Sechin, president of Rosneft made the announcement on Tuesday. “Rosneft ... considers the potential acquisition of BP’s participation in TNK-BP to be an attractive commercial proposition” Mr Sechin said in a prepared statement. “The potential acquisition would complement its existing portfolio and create value for all stakeholders.”
Mr. Sechin seemed to indicate that were Rosneft to acquire the stake it would open up exploration opportunities which have been closed to private companies in Russia for some time, such as lucrative fields in east Siberia.
“Rosneft believes there are considerable synergies to be gained in eastern Siberian upstream, gas development, crude and product logistics optimisation and other areas,” he said.
“At this time of consolidation in the global oil and gas industry, Rosneft is continually evaluating growth opportunities and future partnerships.”
Rosneft have long been understood to be interested in BP’s stake, which analysts have said is worth between $25-billion and $30-billion. The Russian state oil group was flagged as likely buyers in May after BP announced it had received approaches for its share and was pursuing a sale.
But Rosneft will be in competition with BP’s Russian partners in TNK-BP, the AAR consortium, who have also expressed interest in BP’s stake, and given an aggressive record, are unlikely to surrender without a legal battle.
Valery Nesterov, an oil and gas analyst at Troika Dialog in Moscow, said Rosneft’s announcement upped the stakes for AAR investors, forcing them to potentially shell out more money for BP’s stake or risk having to face Rosneft as a co-investor, an undesirable scenario given the two groups’ fraught history.
AAR butted heads with Mr Sechin last year after AAR successfully blocked a landmark exploration deal that BP had struck with Rosneft. Mr Sechin was clearly frustrated with AAR’s interference in the deal. “For the AAR shareholders it’s probably the worst possible outcome” to be 50-50 partners with Rosneft, Mr. Nesterov said.
BP’s move to sell comes at the end of a long series of disputes between themselves and AAR over control of the 50-50 joint venture, which accounts for 29 per cent of the UK group’s oil production.
Mikhail Fridman stepped down as chief executive of TNK-BP in May, saying the partnership with Rosneft had run its course.
If Rosneft’s proposed purchase of BP’s stake were to be done as a share swap, this could potentially leave BP in possession of a large stake in Rosneft.
Mr. Nesterov stressed, however, that Rosneft buying BP’s stake was still one of several possible scenarios. Both BP and AAR could ultimately decide to “preserve the status quo” and remain co-investors in TNK-BP, despite their differences.