18th May 2011
Rosneft, which has the rights to some of the Arctic's most valuable fields covering an area the size of the North Sea, was talking to Shell and Exxon after Monday night's deadline on the tie-up with BP expired. The deal was first announced on January 14.
However, the Financial Times reports that the door has been opened for fresh co-operation talks with BP. It reports that Rosneft said in a statement that it had received fresh proposals from BP on co-operation that went "beyond previous agreements and do not require the extension of the deadline" for the share swap.
BP had needed to persuade its existing Russian partners, four billionaires, to sell their 50pc stake in the joint venture TNK-BP before the deal could be completed. However, BP and the billionaires, known as Alfa Access Renova (AAR), hinted that a buy-out could still be completed at a later date.
This is Money reported that one source at BP said it could still revive the deal, pointing out that while other firms could offer deep water drilling expertise, few would be willing to swap shares.
Rowena Mason comments in her Daily Telegraph blog that that failure of the deal may be good news for shareholders: "In the midst of all the will-they-won't-they excitement, one question we're forgetting to ask is whether trying to revive the talks is a good thing for BP shareholders.
"One of the problems with deal-making before a deadline, under pressure to save face, is that completing at any cost is sometimes mistaken for a positive result."
Nils Pratley reckons the alliance was always on thin ice, commenting in The Guardian: "Let's face it, BP's grand Arctic alliance with Rosneft never set shareholders' pulses racing. There might be a lot of oil underneath the ice but it looked as if BP was becoming over-exposed to Russia by tying itself so closely to state-backed Rosneft via a share swap.
"In that sense, the collapse of the original deal is not an investment disaster."
The tie-up was never to be straightforward, comments City Editor Richard Fletcher in the Daily Telegraph. He says: "Nothing in Russia is straightforward, it sometimes seems, as BP and its battered chief executive Bob Dudley have rediscovered."
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