BP, Europe's second-largest oil company, and OAO Rosneft, Russia's largest oil producer, have extend the deadline to finalize their $16 billion share swap to May 16 from April 14 giving BP much-needed time to workout disagreements with its joint Russian venture, TNK-BP.
TNK-BP, Russia's third-largest oil in producer, has strongly opposed the BP/Rosneft accord, citing competitive concerns and possible violations to its shareholder rights agreement with BP (BP). Complicating matters has been Rosneft's reluctance to allow TNK-BP to become part of the Arctic exploration alliance.
There was speculation earlier this week that BP was considering buying out the 50% of TNK-BP owned by oligarch investors to make the Rosneft deal work, but those talks collapsed. The Wall Street Journal also reported that BP was considering selling its share of TNK-BP, though that option was believed to be unlikely. TNK-BP accounts for a quarter of BP's output and a fifth of its reserves.
A Russian brokerage firm said on Wednesday that Rosneft could replace BP in the deal with either Exxon Mobil (XOM) or Royal Dutch Shell (RDS-A), Europe's largest oil company, Bloomberg News reported. Exxon, the largest U.S. oil company, and Rosneft signed a deal in a January to work together in the Black Sea.
''We are not looking to replace BP in the deal, and we agree to extend the share swap agreement till May 16,'' a Rosneft spokesman told Reuters early Thursday morning.