Igor Shuvalov, deputy prime minister, said on Friday the government would consider further privatising the largely state-owned oil group next year, while Rosneft itself boasted of having “dynamic” potential.
The moves came as the BP board met in London to consider a recommendation from the chief executive, Bob Dudley, that it agree a $26bn (£16bn) cash and shares offer from Rosneft for its 50% stake in the Russian oil producer TNK-BP. Under the deal BP is expected take a stake of more than 15% in Rosneft plus more than $15bn in cash, part of which may be distributed as a special dividend.
BP said it would make no statement until all the details had been clarified and signed off. There is an expectation that a formal agreement will come early next week.
The company will still have to obtain various governmental approvals in Russia and may have to put the asset sale and share swap formally to investors in an extraordinary general meeting. That depends on a ruling from the UK listing authority but BP will be anxious to ensure that there is general support for the move anyway.
“For the TNK-BP sale we will of course discuss with the listing authority and comply with the relevant regulatory requirements at the right time to ensure we have the correct approvals, including shareholder approvals if necessary,” it said in a statement.
Investors have been frustrated by the company’s inability to raise its share price, which stubbornly remains 30% below its level before the Deepwater Horizon disaster in April 2010. Some analysts have called for the company to be broken up to extract more stock market value from the business.
The Russians are aware that BP investors – many of whom are based in the US – are sceptical about the operational performance of Rosneft and the political influence on it from Vladimir Putin’s government.
The Kremlin owns about three-quarters of Rosneft and has constantly talked about lowering its stake to 50% plus one share. The state was originally supposed to shed 15% this year but the plans were scrapped.
Shuvalov told Russian news agencies that the government would consider selling a stake in 2013 and 2014, depending on market conditions. Rosneft managers and officials agree on the need to pick “the best time” to sell and find a “quality investor”, he said.
Shuvalov declined to comment directly on the Rosneft offer to buy BP’s half of TNK-BP and the other 50% owned by Russian oligarchs, who make up the Alfa Access Renova consortium.
Meanwhile, Rosneft representatives in London were busy sending briefing notes describing its structure (of part state energy company and part global corporation) as “unique”, with production levels higher than Norway.
It claimed that state involvement reduced investment risks associated with long-term projects and enabled “responsible access” to the Russian Arctic and other offshore opportunities.
“As a public corporation, Rosneft’s main strategy is to create value for shareholders making management very commercially focused,” it said, while claiming that it had increased production more than tenfold in a decade.
But while Rosneft and the Kremlin were playing up the opportunities for BP, in Russia there was some criticism that a full takeover of TNK would strip the country’s strategic oil sector of competition and efficiency.
Vladimir Milov, a former deputy energy minister and now an opposition leader, said: “This is the restart of a process of renationalisation of the oil industry, which was suspended several years ago.”
Meanwhile, in an apparently unrelated incident, a manager at TNK-BP has been arrested on suspicion of fraud. The interior ministry said in a statement that the suspect, who had previously worked in the Irkutsk regional government, had in September offered jobs in the Kremlin to two businessmen in return for payments of $3m apiece.
Executives at TNK-BP have in the past had run-ins with Russian law enforcement at times of shareholder friction, with two managers arrested in 2008 amid a dispute over strategy that forced Dudley, then chief executive of TNK-BP, to flee Russia.