Rosneft Looking For BP Replacement

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As the April 14 deadline looms for BP and OAO Rosneft to make their controversial $16 billion share swap work, it appears Rosneft, Russia's largest oil company, is preparing for life without the British oil giant and has informed investors that it is looking for other partners.

Rosneft told investors that it is already seeking a replacement for BP in the landmark Arctic exploration alliance the two parties announced in January, according to the Wall Street Journal. BP's joint Russian venture, TNK-BP, has blocked the deal due to competitive concerns and allegations that it violates its shareholder rights agreement with BP.

Desperate to save the Rosneft accord, BP (BP), Europe's second-largest oil company, engaged in talks about buying TNK-BP's oligarch investors out of their stake in the venture, but those talks fell apart. Then on Tuesday evening the Journal reported BP was mulling the possibility of selling its share of TNK-BP.

Rosneft did not disclose specific names, if any, it was talking to in terms of replacing BP on the Arctic venture, but the company has said it wants to work more with Western oil majors, although a Black Sea project with Chevron (CVX), the second-largest U.S. oil company, has been rumored to be in trouble as well.

BP's shareholder meeting starts tomorrow and losing out on the Rosneft deal is viewed by some analysts and industry observes as a black eye for BP CEO Bob Dudley who is struggling to repair his image in Russia and restore investors' confidence.