BP Deadline Here With No Deal For TNK-BP

Printer Friendly Version

The deadline for BP, Europe's second-largest oil company, and OAO Rosneft, Russia's largest oil producer, to complete their $16 billion share swap has arrived with no news regarding BP's efforts to acquire TNK-BP, its joint Russian venture with oligarch investors. Press reports said a deal could be announced on Monday, but no such announcement has been made.

BP's (BP) efforts to acquire TNK-BP, perhaps for as much as $30 billion, stem from the British company's desire to move forward with the share exchange with Rosneft that TNK-BP has stridently opposed since the deal was announced earlier this year. Talks may continue between BP, Rosneft and the legal group representing TNK-BP investors, Bloomberg News reported, citing sources with knowledge of the matter.

The original deadline for BP and Rosneft to complete their accord was April 14, but amid opposition from TNK-BP, Russia's third-largest oil producer, the deadline was extended to May 16. Rosneft does not TNK-BP to be part of the Arctic exploration pact because TNK-BP lacks offshore expertise in the Arctic.

Rosneft could simply scrap the deal with BP altogether and choose another partner such as Chevron (CVX), the second-largest U.S. oil company, or Royal Dutch Shell (RDS-A), Europe's largest oil company, Bloomberg reported, citing a Citigroup note.

If BP was bumped out of the venture in favor of Shell, it would be a stinging blow to the British oil giant because Shell is its biggest rival and the two have an often rocky relationship.