See More

BP free to sell TNK-BP stake

Jun 04 2012 14:43 Reuters

Related Articles

BP considers selling its stake in TNK-BP

BP probes corruption claim in shipping unit

BP boosted by oil spill settlement

BP in $14bn oil spill settlement talks

BP seen paying $20-25bn for oil spill

BP first-quarter profit slides 18%


Moscow - The Russian billionaire co-owners of TNK-BP, the Russian joint venture of oil major BP, are not in a position to block the possible sale of the British company's stake, a source close to BP said.

"We can sell it if we want to," the source told Reuters in response to speculation that the billionaire quartet would seek to veto any deal.

The Financial Times newspaper, citing a spokesperson for Russian shareholder consortium AAR, on Monday reported that the TNK-BP shareholder agreement prevents BP from giving out any confidential information to a third party without its consent.

The FT said such limitations could make it hard for a prospective buyer to complete due diligence on BP's stake, effectively giving AAR a veto right over any deal and making it harder for BP to exit without the risk of litigation.

Sources on both sides have said that it would be possible to bypass a clause in the joint venture's shareholder agreement that offers each owner the right of first refusal to buy their partner should one decide to exit.

BP, which paid a total of $8bn in 2003 to buy one half of TNK-BP, said on Friday it had received expressions of interest in its stake - estimated to be worth $30bn - and would pursue a possible sale.

Sources familiar with the matter say that the main suitor is Rosneftegaz, a Russian state energy holding company that controls Rosneft, the country's largest oil company.

Igor Sechin, a former deputy prime minister and close ally of recently-elected President Vladimir Putin, has been appointed CEO of Rosneft. Putin - in his last act as prime minister - nominated Sechin to the board of Rosneftegaz.

Sources close to Rosneft say that Sechin, whose dream of striking an Arctic exploration and share swap deal with BP was thwarted by AAR a year ago, has been given a mandate to build a state oil champion capable of competing on a global scale.

Sources close to AAR have said that they would be willing to buy out BP for a consideration of $25bn.

One veteran Moscow-based executive said a state buyout appeared the most likely option after the AAR shareholders - led by banking-to-retail billionaire Mikhail Fridman - lobbied former president Dmitry Medvedev to oppose the BP-Rosneft deal.

"The end game is that the state buys (TNK-BP)," said the source. "The issue is that Fridman overplayed his hand a couple of times."




Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The upcoming electricity and fuel price hikes will:

Previous results · Suggest a vote