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BP CEO: Russian Injunction Against Rosneft Deal Likely To Succeed

BP CEO: Russian Injunction Against Rosneft Deal Likely To Succeed
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Τρι, 1 Φεβρουαρίου 2011 - 17:16
BP PLC's (BP) partners in its Russian joint venture TNK-BP are likely to obtain an injunction to temporarily halt talks between BP and OAO Rosneft (ROSN.RS) about an Arctic exploration deal, BP Chief Executive Bob Dudley said Tuesday.
BP PLC's (BP) partners in its Russian joint venture TNK-BP are likely to obtain an injunction to temporarily halt talks between BP and OAO Rosneft (ROSN.RS) about an Arctic exploration deal, BP Chief Executive Bob Dudley said Tuesday.

"There is a relatively low hurdle in the U.K. for granting an injunction," Dudley told reporters at a press conference. "That may well happen today."

The Royal Courts of Justice in London are hearing the injunction request from BP's Russian partners, the Alfa-Access-Renova consortium, in a private hearing that began at 1200 GMT Tuesday. AAR says the BP-Rosneft deal violates a provision in its shareholder agreement that states TNK-BP should be the sole vehicle for BP in Russia .

BP says the shareholder agreement allows BP to pursue other opportunities in Russia , provided TNK-BP is also offered a chance to participate. Dudley said BP has now submitted that offer to TNK-BP's board and he is open to the company participating in some way.

If the injunction is granted, it wouldn't change anything about the Arctic exploration deal agreed with Rosneft last month and would merely result in a "time out" in continuing talks, Dudley said.

However, the court order could delay the completion of a share swap deal also agreed by BP and Rosneft, a BP spokesman said.

Dudley shrugged off the threat that AAR would vote against TNK-BP paying a special dividend. That dividend plan was only initiated two weeks ago at the request of AAR and BP is neutral about its payment. "If they don't want to do it, we're fine with that," he said.

BP agreed last month to form a joint venture with Rosneft to explore for oil in the Arctic South Kara Sea over the next decade. The deal also included a share swap that saw BP taking an additional 9.5% stake in Rosneft and the Russian company taking 5% in BP.

Dudley said its partners in TNK-BP were informed about the Arctic talks with Rosneft, but he acknowledged that details of the share swap were "held very closely" and may have surprised AAR .

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