British Petroleum Plc on Oct. 22 sold its 50 percent stake in TNK-BP to Rosneft, Russia’s biggest oil company. This marks the end of BP’s adventure into Russian oil exploration and production via TNK-BP.
The state-owned oil company offered BP $17 billion in cash and a 13 percent stake in Rosneft. For BP, the deal means it gets to keep a foot in the door of the Russian energy market backed by the Kremlin.
Its previous involvement with TNK-BP, which wasn’t backed by the state, brought some profits, but also lots of troubles. The AAR (Alfa Access Renova) group of Russian oligarchs controlling the other 50 percent of TNK-BP had major disagreements with BP over the company’s strategy.
The conflict escalated in 2008 when Bob Dudley, who then was the CEO of TNK-BP, had to flee Moscow after what he calls a “campaign of harassment” from AAR chiefs. AAR also agreed to dispose of their stake, valuing the deal at a total of $55 billion. The oligarchs have been offered $27 billion for their stake in TNK-BP.
