David Prosser: The stakes in Russia get ever higher for BP and its boss


Outlook When BP and Rosneft abandoned their attempt a few weeks back to agree a tie-up that would see the two companies swap their shares and explore the Arctic Ocean together, the message was that talks would nonetheless continue. The sticking point, of course, is the position of TNK-BP, BP's existing Russian venture, because AAR, its 50/50 partner, is deeply unhappy about the Rosneft deal. BP's line on that problem was that an accommodation could still be reached with AAR, particularly without the pressure of a deadline hanging over everyone's heads.

Well, maybe so – but the mood music so far does not sound any more harmonious. If anything, in fact, relations between BP and AAR appear to have deteriorated further. The British company has now taken to dropping great big hints that in the absence of an agreement, it will sell Rosneft half its stake in TNK-BP, as well ascontrol of the voting power of the whole 50 per cent block.

That looks like a pretty bare-faced attempt to bounce AAR into signing up to a solution to the impasse – presumably the one on which agreement was almost reached last time, under which the billionaires who run the company would have sold up. Certainly, the prospect of negotiating with Rosneft over every last TNK-BP decision is unappealing to AAR to say the least.

These are dangerous tactics on the part of BP. It is not clear whether it really intends to sell to Rosneft, or whether it simply wants to worry AAR. But either way, it is worth remembering that what really stymied a deal last month was the lack of trust between all the parties concerned. Their advisers ran out of time to come up with a legal formulation that would have tied everyone to their word once an AAR sale was agreed – that such a formulation was deemed so essential tells you everything you need to know about the poisonous relations between these companies.

It is difficult to see how BP's latest threat to AAR might improve matters. And the problem for the British company is that it has more to lose than the Russians. Every day that goes by without a peace deal is another day for rivals to cosy up to Rosneft. Shell, in particular, has been sniffing around an almost identical Arctic venture and can do a deal with Rosneft that comes with none of the AAR baggage. The word is that the only thing stopping such a deal is Shell's reluctance to go for the type of share swap BP has agreed.

Moreover, BP isn't just at risk of missing out on the Arctic. There is also the possibility of a damaging legal case with Rosneft, should the Russian company decide it wants to play hardball. Another legal wrangle with AAR is likely too if BP makes good on its threat to sell up to Rosneft.

All in all then, this soap opera looks certain to run on for some time yet. BP's chief executive, Bob Dudley, knows the prize in the end, the right to exploit an Arctic block that is of a similar size to the North Sea, is hugely valuable. But he doesn't seem to be getting any closer to claiming it.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory