BP, Rosneft may offer $30 bln to AAR to complete joint venture

BP and Russia’s top oil producer Rosneft may offer the AAR consortium $30 billion including $9 billion in BP shares for half of TNK-BP on Tuesday, Vedomosti business daily quoted sources close to the companies as saying.

AAR, which represents the Russian partners in TNK-BP, has been blocking a $16 billion deal between BP and Rosneft which included a share swap and a joint development of the Arctic shelf saying the contract violated the original TNK-BP partnership agreement between AAR and BP. The deadline for completing the BP-Rosneft alliance expired at 3 a.m. Moscow time on Tuesday.

Vedomosti quoted sources as saying AAR wanted a number of written guarantees for the purchase, while BP and Rosneft only wanted to sign a trilateral binding memorandum.

In January, Rosneft and BP agreed on a share swap in which Rosneft was to exchange 9.5 percent of its stock for 5 percent in BP. The deal, supported by Deputy Prime Minister Igor Sechin, also includes plans to jointly develop oil production in the Russian Arctic.

But the contract was blocked by a court injunction following legal action by AAR, which said the BP-AAR shareholder agreement obliged BP to ask for TNK-BP’s approval before BP could get involved in any Russian project.

Earlier in May, a court permitted Rosneft and BP to swap shares if TNK-BP took part in their Arctic joint venture. The swapped shares were to be transferred to a special trust fund and used only as an investment instrument without the possibility of voting with them.

BP CEO Robert Dudley said last week his company was ready to accept the terms. However, Rosneft said it did not want TNK-BP in the venture.

A Rosneft source said if it failed to agree with AAR, it would abandon the BP deal. A successful deal would give it the option of buying half of TNK-BP, making Rosneft the largest state oil producer in the world.

MOSCOW, May 17 (RIA Novosti)

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