25th March 2011
BP has slipped nearly five pence to 476p a share in this morning's trading as a court blocked its exploration deal with Russian oil giant Rosneft. The news is reported here in the Guardian's market report.
The court decided that a previous agreement with a consortium of Russian billionaires – that created BP's existing Russian joint venture TNK BP – prevented the deal going ahead.
BP says it is going to press ahead with plans for a $16bn share swap with Rosneft but without the oil exploration agreement, it is unclear what benefit this may have. One analyst was definitely scathing.
Citigroup's Alastair Syme told the Guardian: "On the face of it, this looks a messy situation and one where we think BP will do well to emerge with all of its investment in TNK-BP, reputation in Russia and Arctic oil deal intact."
Here oil industry website Upstream speculates that the decision of the TNK-BP investors to go to court will strain relations between them and Russian Prime Minister Vladimir Putin in a country where political risk comes high on the list of investment risks.