BP blow as Rosneft deal collapses
BP's hopes of making the Arctic a key part of its recovery plan were dealt a major blow today by the failure of a share swap and exploration deal with Russian oil group Rosneft.
Talks to broker a settlement with TNK-BP, its existing Russian partner, which had blocked the deal, ended without agreement, meaning the UK firm missed a midnight deadline set by Rosneft to get the deal back on track.
BP said discussions would continue between all of the parties, but observers say the failure to conclude a deal could leave the way open for rival oil companies to take its place.
It also leaves a potentially huge hole in plans by new chief executive Bob Dudley to turn around the group following the Gulf of Mexico disaster last year.
The announcement is the latest twist in a protracted saga that started in January when BP and Rosneft announced an £8 billion share swap that also included exploration rights for the Arctic's Kara Sea.
Amid much fanfare, Mr Dudley hailed the Rosneft deal as "historic" and "groundbreaking", with analysts also praising the group for pulling off what was seen as a significant coup for the group after its US problems. Huge oil reserves are thought to lie under the Arctic Circle.
The deal was subsequently scuppered after TNK-BP successfully claimed it breached an earlier agreement that it had to be included in deals undertaken by BP in Russia.
The talks yesterday reportedly involved an £18.5 billion buyout of TNK-BP. It is owned by a consortium of Russian billionaires called Alfa Access Renova (AAR), who would have got cash and substantial stakes in both BP and Rosneft if a revised deal had been concluded.
Today BP said it was still hopeful a deal can be struck, adding it would intensify its efforts to ensure TNK-BP's continued success.
"In recent months, BP has conducted detailed negotiations with AAR and Rosneft to seek a reasonable and businesslike solution that would allow the agreements to proceed to the satisfaction of all parties. Such a solution has not been found at this time, although talks will continue," it said in a statement.
Mr Dudley added: "BP remains committed to Russia, to working constructively with AAR in TNK-BP and to our existing good relationship with Rosneft."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...