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BP moots retreat from Russia

Friday, June 01, 2012 - 01:47

June 1 - UK oil company BP says it's considering the sale of its stake in Russia's third-largest oil producer, TNK-BP, after offers came in from undisclosed buyers. Joanne Nicholson reports.

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It's been a lucrative but troublesome venture, and now it could be coming to an end. BP says it is considering a sale of its half-share of Russia's third oil producer TNK-BP after receiving what it described as unsolicited approaches. A spokesman refused to identify the companies which had made the offeres, but state-backed Rosneft and Gazprom are thought to be the most likely suitors. The TNK part of the company is owned by Alfa Acess Renova. On Monday, one of the billionaire owners, Mikhail Fridman, resigned as chief executive of TNK-BP, citing a breakdown in relations with BP. It's thought the move was to force the company to buy out AAR's stake. Robert Coles of Reuters Breaking Views says an exit from Russia would create new questions for BP. SOUNDBITE (English) ROBERT COLES, REUTERS BREAKING VIEWS, SAYING: "The fact of hydrocarbon geology is it's getting increasingly hard to find big deposits and there are increasingly difficult places, run by governments who aren't perhaps as straightforward as one would like." BP formed TNK-BP with AAR in 2003 to expand into Russia but shortly after, Russia became more hostile to foreign and private sector investment. The Kremlin's preference to reserve larger fields for state-controlled groups limited TNK-BP's ability to expand in the country. It's been a huge financial success for BP, yielding billions of dollars more in dividends than it invested. And that's what BP would be giving up, along with 30 percent of its oil and gas production. Joanne Nicholson, Reuters

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BP moots retreat from Russia

Friday, June 01, 2012 - 01:47