Wednesday, April 13, 2011

BP tries to salvage Russia deal Tribunal

Wednesday, April 13, 2011

LONDON - BP Friday said that it plans to court permission to the lead with only half of its partnership agreement with Rosneft search, a Swedish court of arbitration was blocked a day after the entire deal.

The British oil giant is seeking to its 8 billion US-dollar contract with the Russian State oil company, save includes exploring a plan for a joint venture of the Russian Arctic.

BP said that it will go for the share exchange part of the partnership, would question, because it resulted not actual business in Russia, while it seeks, the dispute with other Russian partners.

"BP now apply for a determination whether the exchange of shares alone can continue," said BP.

The Russian group of billionaires who are BP partners in TNK-BP have opposed the agreement with Rosneft since it was announced in January. They argue, that said the business with its own shareholder agreement, in which BP conflict, obliged, to monitor Russian business opportunities with them exclusively.

The Tribunal ruling late Thursday has swap both the Arctic exploration deal a setback at BP efforts, which in the wake of the oil spill in Gulf of Mexico was blocked remake. BP shares fell 1 percent in early trading on Friday in London.

BP said that it remained committed to the business with Rosneft. "BP looks forward to the search for a way, their differences of opinion with their Russian partners allow this important Arctic developments in the future, continue to resolve" the company said in a statement. He said that TNK-BP BP "Vehicle in Russia primary business."

BP company in Russia are decisive for their future. Russia is about a quarter of the BP global oil output, and drilling in the Russian Arctic remains one of the best ways of the company, to increase reserves and production in the future.

The dispute is also hurting BP finance as the Russian partners have blocked TNK-BP payout multi-billion dollar dividends until a solution is found. The Russian venture has retained already $1.7 billion due to BP.

After the accident in the Gulf of Mexico in April last year, in which 11 workers died and leaked millions barrels of oil in the Gulf, BP has forced, $40 billion claims, numbers aside shoots required, selling it assets all over the world.

But recovered significantly in the last months of the company's share price has and returns its new Chief Executive, Robert Dudley, a sense of resistance to its operations. He has lined up more than 30 projects around the world, but to none as potentially important as the Rosneft handle drill in the Arctic.

The Russian partners say that with BP, after an earlier in the year 2008 newly negotiated all potential new business in Russia or the Ukraine in the TNK-BP Board offer their shareholder agreement BP before he signed it regardless. For the exchange of shares and Arctic ventures, Mr Dudley negotiated but instead directly with the State oil company, Rosneft.

The Russian partner had proposed that BP relax this agreement and TNK-BP to leave his facing similar conditions take place. As BP owns 50 percent of Russian venture, this approach BP would the value of which can keep the initial deal, the half.

BP representatives voted this proposal at a March 12 meeting the Supervisory Board of TNK-BP, and the pages now appear in a cul-de-sac.

"Deliberately ignored the provisions of the agreement shareholder was a serious misjudgment of BP, Stan Polovets, the Chief Executive of AAR, said in a statement after the verdict Thursday.""We expect to Bob Dudley, to correct the situation and rebuild the trust that has been lost."

The Tribunal herrschenden is also a setback for the Russian Government, the BP decided first major project of offshore oil in the Arctic drilling for his, says it was the most qualified for this work experience of the company with disaster in the Gulf.

BP and Rosneft must now find a way to save the business. While BP has indicated that it could negotiate a compromise, Rosneft may use his connections to the Government, the Russian partners a resolution achieve pressure so that offshore exploration this summer as planned.

Wall Street analysts said that they thought that BP would finally in the Russian Arctic, despite the setback to drilling. Some say, probably require BP to its TNK-BP partners in the deal, bring a dilution of BP, what means any profits. Others think that only try Russian partners in TNK-BP to force a buyout of BP.

"To determine the final outcome of the game in the third inning as the ball game not over, is", said Mark Gilman, oil and gas analyst at benchmark. "It will be negotiated out." "How, which discusses remains to be seen."

Fadel Gheit, a senior analyst at Oppenheimer & company, said that with the support of Prime Minister Vladimir Putin V., the BP deal with Rosneft finally would need funding situation. "The question is not if;" It's like, "he said."This way basically to force TNK BP hand out to buy them. "This is your exit strategy."

Clifford Krauss contributed reporting from Houston

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