August 16, 2022

BP to Look for Oil Outside Russia After Collapse of Rosneft Deal

LONDON — BP said on Wednesday that it would focus on oil exploration outside Russia after a deal with Rosneft collapsed last month, but added that there were no plans to sell its stake in the Russian joint venture TNK-BP.

The BP chief executive Robert W. Dudley said “very quietly BP is getting on with its strategy of exploration” in Australia, Brazil, Azerbaijan and the United Kingdom.

“We’re moving on,” he said at a news conference to release the company’s annual review of energy markets.

Mikhail Loskutov, a spokesman for the AAR consortium, which is BP’s partner in TNK-BP, declined to comment, as did a Rosneft spokeswoman.

Mr. Dudley’s plan to explore in the Arctic through a share swap and cooperation agreement with Rosneft, Russia’s state-controlled energy company, failed when BP’s partners in TNK-BP took legal action to block the deal. BP said in May that it would continue to talk to both Rosneft and its partners in TNK-BP, but Mr. Dudley said on Wednesday that “it’s very quiet” and that “there was no news” on that front.

Instead, he said, BP would focus on exploration opportunities elsewhere, including in Angola and Trinidad, and on further rebuilding trust in the company in the United States, where it is still recovering from the Gulf of Mexico spill last year.

Mr. Dudley denied newspaper reports published on Tuesday that said BP was preparing to sell some of its stake in its lucrative TNK-BP joint venture to try and rescue its deal with Rosneft.

“BP is not planning to sell its shares in TNK-BP,” Mr. Dudley said. He also described BP’s relationship with Rosneft as “excellent,” despite the disappointment about the collapsed deal.

Mr. Dudley’s comments indicated that the only way to revive the deal with Rosneft, which also included a share swap component, was for its TNK-BP partners and Rosneft to come to an agreement. BP’s partners in the TNK-BP joint venture, a group of Russia billionaires, claimed the deal violated their shareholder agreement. TNK-BP is Russia’s third-largest oil producer and accounts for about a quarter of BP’s output.

Carl-Henric Svanberg, BP’s chairman, said reaching an agreement was difficult because it would involve “three individuals with their own agendas and time horizons.” He added that there were 40 other exploration blocs in the Arctic region and that he was optimistic that “some Rosneft deal would materialize in some form or another down the line.”

BP’s shares fell 1.3 percent in London on Wednesday. They have dropped 7 percent since BP announced the deal with Rosneft in February and more than 30 percent since the rig explosion in the Gulf of Mexico in April 2010.

Some analysts said previously that BP would have to wait until presidential elections in Russia that are scheduled for next year to try to revive the exploration pact with Rosneft. In the meantime, Rosneft is free to open talks with other international oil companies about cooperating on exploration. A possible short list includes Statoil, which is partly owned by the Norwegian government, Exxon Mobil and Royal Dutch Shell.

Some analysts were skeptical, however, that Rosneft would find another oil major like BP that would be willing to welcome Rosneft as a shareholder through a dilutive share swap.

Article source: http://feeds.nytimes.com/click.phdo?i=7bf36cdf244055ebbe2dbe4ea0c5a3ff

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