BP still battling to save its £10bn Rosneft deal

By Sarah Arnott
Sunday 23 October 2011 08:39

BP remained locked in confrontation with its Russian partners last night as the tribunal tasked with ruling on the oil giant's share-swap plans was forced into a second day.

The judges are to decide whether BP's proposed $16bn (£9.9bn) share-swap with state-owned Rosneft violates the shareholder agreement of its Russian joint venture, TNK-BP.

Following a complaint from the Alfa-Access-Renova (AAR) consortium that owns the other half of TNK-BP, the Stockholm tribunal has already ruled that BP's plans for joint Arctic exploration with Rosneft cannot go ahead. Now BP is trying to press ahead with only the share-swap element of the deal announced in January.

AAR's four Russian oligarch backers claim that the tie-up with Rosneft contravenes the TNK-BP shareholder agreement specifying that all business in Russia be conducted through the joint venture.

BP also took a hit in the US yesterday when the Interior Secretary Ken Salazar publicly rejected reports that the company was negotiating a deal with the US government to restart drilling in the Gulf of Mexico, barely more than a year after the Deepwater Horizon disaster last April that killed 11 people and unleashed the worst oil spill in history.

"There is absolutely no such agreement, nor would there be such an agreement," Mr Salazar said.

Separately, BP announced the sale of a wholly owned subsidiary, Arco Aluminium, to a Japanese consortium for $680m. The sale of the Kentucky-based company – which supplies the rolled aluminium sheet mainly used to make drinks cans – is part of a $30bn divestment programme to re-focus the business and raise funds to pay for the clean-up of the Gulf of Mexico spill.

So far BP has agreed to $24bn-worth of sales, including $775m of production assets in Pakistan and a shake-up of refinery capacity in the US that will see the sale of the Texas City and Carson, California, facilities.

"Although a strong business, Arco Aluminum is clearly a non-strategic asset for BP," Bob Dudley, the BP chief executive, said. "Today's agreement will deliver an attractive price, unlocking value for shareholders."

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments