TNK-BP lays feud aside as it lines up billion-dollar oil and gas deals
Sunday 29 May 2011
TNK-BP is back on the acquisition trail after months of internal feuding between its British and Russian oligarch owners stifled the oil and gas group.
The joint venture is now the overwhelming favourite for the Polish government's 51 per cent stake in Lotos, a $4.5bn-valued company that includes arguably Europe's most modern oil refinery. TNK-BP is also believed to be mulling a bid for ConocoPhillips' Vietnamese assets, which the US giant is selling as part of a $17bn divestment programme.
Such developments suggest a thawing in the relationship of BP and Alfa-Access-Renova (AAR), the vehicle's two owners. BP's chief executive Bob Dudley angered AAR in January when he announced a £10bn share swap and Arctic exploration deal with rival Russian group Rosneft.
AAR successfully argued that the Rosneft plan broke the TNK-BP partnership agreement. Though BP still hopes to resurrect the deal, the British group is already looking at alternative growth strategies, such as a tie-up with Chinese state-owned group CNOOC to look for oil in the South China Sea.
TNK-BP was one of a handful of Russian majors, including Rosneft, that expressed an interest in Lotos. However, it was always thought that the Kremlin would only allow one of them to pitch for the group and it appears to have plumped for TNK-BP.
Although a deal is unlikely until next year, industry sources suggested that the Russians had by far the best-financed proposals. A corporate lawyer in the region said that any of the Russians should eventually win the auction. "There's nobody else meaningful looking at Lotos, just some funds," the source claimed.
It is understood that the London office of HSBC has been appointed to sell Conoco's Vietnam assets, which could be worth as much as $1.5bn. Although state-run PetroVietnam is an obvious bidder, it is understood that TNK-BP would like to add to its existing operations in the country.
TNK-BP bought BP's Vietnam assets in October last year in a $1.8bn deal that included operations in Venezuela. This was part of the BP sell-off programme to raise money that could be needed in the Gulf of Mexico clean-up after the Deepwater Horizon rig explosion.
Rosneft also seems to be turning its attention elsewhere. It is understood the group is keen on the Mazeikiai oil refinery in Lithuania, which PKN Orlen is thinking of selling. It is also courting other partners for the Arctic exploration deal. Royal Dutch Shell has been mentioned. The Russian Prime Minister, Vladimir Putin, said last week that he would be "comfortable" with Shell as a partner for Rosneft.
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