Arbitration panel scuttles BP-Rosneft deal

MOSCOW, March 24 (RIA Novosti) – A Stockholm arbitration panel ruled on Thursday that the interim injunction issued on a deal between BP and Rosneft should continue, Alfa-Access-Renova (AAR) CEO Stan Polovets said.

AAR represents a group of tycoons who own half of British-Russian oil firm TNK-BP, which took the case to court.

A spokesman for the Russian prime minister said the government had been informed of the arbitration ruling.

“We’ve just received the information and need to study it,” Dmitry Peskov said.

AAR said it expected BP to comply with the ruling.

BP said it “has always been and remains, fully committed to investing in Russia” and would look for ways to carry out the deal with Rosneft despite the injunction.

“BP will now apply for a determination whether the share swap may proceed on its own,” the company said in a press release posted on its website.

BP said it looks forward to “finding a way to resolve its differences with its Russian partners to allow these important Russian Arctic developments to proceed in future.”

The company said it was disappointed that the agreements would not be able to proceed in the form intended but said it would honor the TNK-BP shareholders’ agreement and respect the decision of the arbitrators.

TNK-BP, a 50-50 joint venture between BP and a group of tycoons represented by the AAR consortium, said that BP violated a shareholder agreement.

BP and Rosneft agreed a $16 billion share swap deal on January 14 in which Rosneft exchanged 9.5% of its stock for 5% in BP. The two firms also agreed to jointly undertake exploration and development projects on the Russian Arctic shelf.

AAR argues that the BP-Rosneft deal violates the right of refusal on deals in Russia enshrined in TNK-BP’s shareholder agreement.

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