David Prosser: The stakes get ever higher for Bob Dudley in Russia

Outlook There are two ways to look at the latest misfortune to befall BP's alliance with Rosneft. One is to say that Bob Dudley, chief executive of BP since the autumn, is making a pig's ear of his first six months in the job. The other is to reflect on where BP might be 10 years from now if, in the end, it can snatch victory from the jaws of defeat in Russia. And for the time being, it's not possible to say which of these alternatives ought to be the prevailing view.

A fortnight ago, it looked as if BP had made the breakthrough, after agreeing its Russian joint venture, TNK-BP, could take its place in the Arctic exploration it is planning with Rosneft. But while that satisfied AAR, BP's other half at TNK-BP, which was furious its British partner had been planning a big Russian adventure without it, Rosneft itself was not convinced. It had already warned it didn't want TNK-BP involved and was in no mood to change its mind. Now it is refusing to extend the deadline set for agreement.

There is no denying this leaves Mr Dudley with a great deal of egg on his face. No one at BP could have been better placed to anticipate how AAR would react to his alliance with Rosneft because Mr Dudley spent a long period running TNK-BP in Moscow before leaving the country when the relationship between BP and its Russian partners last went sour. Yet he seems to have utterly misjudged the determination of AAR to fight this one out – and he also overestimated the extent to which the Russian government was prepared to get involved to push the deal through.

That said, all is not yet lost. Mr Dudley is now pinning his hopes on further talks in the weeks ahead, crossing his fingers that private negotiations with Rosneft, to be held behind closed doors without the pressure of a looming deadline, might resurrect and consummate the deal.

Moreover, there are some good reasons to think those hopes will not be dashed. For one thing, sources close to the talks of the past few days say that an agreement was almost reached ahead of Monday's deadline, only for a last-minute technicality to come up.

BP, it would seem, has agreed to buy AAR out of TNK-BP at a price accepted by both sides, which would put an end to the impasse. The only outstanding issue is whether its share swap with Rosneft can proceed before that buy-out has completed. None of the parties have enough trust in each other to agree on that, so a legal solution protecting everyone's issues has to be found.

Moreover, while Rosneft is undoubtedly fed up with BP's inability to bring this agreement to fruition, it still needs a partner for the Arctic exploration. And while it has alternatives – some of whom have already begun registering an interest – the British company is not only bringing its technical expertise to the venture, it is also offering long-term faith and support in the form of the share swap. That's something its American rivals, for example, would struggle to match, given the politics back home, should Rosneft be tempted to switch to them.

In the context of the circumstances in which Mr Dudley took over at BP – relieving the accident-prone Tony Hayward of his duties – the easy option is to look at this episode as yet another slip-up from a company that has lost its grip. But it is worth keeping at least half an eye on the prize at stake: the Arctic fields in question are roughly the size of the North Sea. If BP's boss gets his hands on those resources in the end, he'll regard his current embarrassment as a small price to pay.

That's the charitable view. If the latest setback to the Rosneft deal proves terminal – and while BP thinks it is close to clinching its buy-out of AAR, its record of reading its Russian partners is dismal – Mr Dudley will face a difficult struggle to regain his authority. Maybe even an impossible one.

Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Dawkins: 'There’s a very interesting reason why a prince could not turn into a frog – it's statistically too improbable'
newsThat's Richard Dawkins on babies with Down Syndrome
Malky Mackay salutes the Cardiff fans after the 3-1 defeat at Liverpool on Sunday
footballFormer Cardiff boss accused of sending homophobic, racist and messages
Arts and Entertainment
Martin Amis: Taken to task over rash decisions and ill-judged statements
booksThe Zone of Interest just doesn't work, says James Runcie
Life and Style
life – it's not, says Rachel McKinnon
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Corporate Tax Solicitor

Highly Competitive Salary: Austen Lloyd: CITY - HIGHEST QUALITY INTERNATIONAL ...

Relationship Manager

£500 - £600 per day: Orgtel: Relationship Manager, London, Banking, Accountant...

Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Test Lead (C#, Java, HTML, SQL) Kingston Finance

£40000 - £55000 per annum: Harrington Starr: A Global Financial Service Organi...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home