BP May Seek New, Not ‘Reincarnated’ Rosneft Deal, Shmatko Says
BP Plc (BP/) and OAO Rosneft, Russia’s biggest oil producer, may hold talks on a new type of deal after a $7.8 billion share swap and Arctic exploration alliance collapsed, Russian Energy Minister Sergei Shmatko said.
Rosneft pulled out of its agreement with BP after a second deadline for the deal expired on May 16. The U.K. explorer’s billionaire partners in TNK-BP, Russia’s third-largest oil producer, argued their shareholder agreement gave them exclusive rights to pursue opportunities in Russia for BP.
“The deal became a drag” in its previous form, Shmatko told reporters today in Moscow. “I don’t believe in the possibility of reincarnation for that particular deal.”
BP’s four-month battle to salvage the Rosneft deal was driven by the chance to unlock billion barrels of oil. International oil companies are competing for a diminishing number of drill sites as foreign governments limit access to resources, while Russia is seeking foreign technology to tap Arctic reserves and maintain output.
“I am very sorry the deal didn’t happen: it would have met our interests in terms of output growth and gaining access to new technology,” Shmatko said. “Both Russia as a country and Rosneft would have won significantly if it had gone forward.”
Rosneft will be “picky” choosing any new partner, Shmatko said. Rosneft said last week that it will consider proposals on the Arctic from all interested international companies.
BP had sought, with Rosneft’s support, to buy out AAR, as its partners in TNK-BP are known for about $32 billion, a person with knowledge of the talks said last week.
A buyout “is completely their problem,” Shmatko said. “They didn’t achieve anything.”
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