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BP Delays TNK-BP Board Vote on Rosneft Deal to Study Plan

TNK-BP’s board delayed a vote on replacing BP Plc in an alliance with OAO Rosneft for a second week, as directors from the U.K. explorer and an independent member asked for more time to study proposals, the venture said.

The next board meeting is scheduled for March 12 in Paris and TNK-BP’s participation in the deal is the only agenda item, the Moscow-based oil venture, owned equally by BP and a group of billionaires, said in an e-mailed statement today.

Management last month recommended TNK-BP pursue a plan to explore for Arctic offshore resources with Rosneft and swap a 5 percent stake in BP for shares in Russia’s largest oil producer. A board meeting scheduled for Feb. 25 failed to convene as BP’s representatives weren’t available.

Joining Rosneft in the deal is “extremely compelling for TNK-BP and its shareholders, both strategically and financially,” billionaire owner and interim Chief Executive Officer Mikhail Fridman said in the statement. “We hope that the next board of directors meeting will support the management’s recommendations.”

BP spokesman Vladimir Buyanov confirmed the next meeting, while declining to explain why the vote was delayed.

The board must decide on management’s recommendation in two meetings, according to a request for an injunction filed by the billionaires last month, a copy of which was read by Bloomberg.

A favorable board vote will give TNK-BP the right to start talks with BP and Rosneft, Fridman said. Rosneft has said it needs BP’s expertise to explore offshore Arctic resources, rather than a partnership with TNK-BP.

‘Strategic Priority’

Russian Deputy Prime Minister Igor Sechin, who is also Rosneft chairman, described the alliance with BP as a “strategic priority” and warned both BP and the billionaire shareholders of legal action if the deal is sabotaged, according to an interview with the Wall Street Journal published on Feb. 22 and confirmed by Rosneft spokesman Rustam Kazharov.

TNK-BP can raise the financing it may need to carry out the deal, Chief Financial Officer Jonathan Muir said this week. The BP stock for the share swap had a market value of about $7.8 billion when the deal was announced in January, and the U.K. company was to cover the first $1 billion of investment in the Arctic project.

BP and AAR, which represents billionaires Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, agreed to arbitration in the week starting March 7, BP said last month. The deal has been blocked until the end of arbitration.

TNK-BP, Russia’s third-biggest oil producer, has exclusive rights to pursue opportunities for BP in Russia under the shareholders’ agreement, according to AAR.

BP and AAR each have four representatives on the board, and there are three independent directors: former German Chancellor Gerhard Schroeder; Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs big business lobby, and James Leng, a senior adviser to HSBC Holdings Plc.

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