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TNK-BP blocks BP Russian Arctic venture with Rosneft | TNK-BP blocks BP Russian Arctic venture with Rosneft |
(about 4 hours later) | |
Russian shareholders of TNK-BP have blocked BP's Arctic exploration deal with state-owned Rosneft. | Russian shareholders of TNK-BP have blocked BP's Arctic exploration deal with state-owned Rosneft. |
"We won," said a spokesman for the oil joint venture's Russian shareholders. | "We won," said a spokesman for the oil joint venture's Russian shareholders. |
A Swedish arbitration panel in London agreed that the Arctic deal violated a previous agreement between them and BP made when they set up TNK-BP. | A Swedish arbitration panel in London agreed that the Arctic deal violated a previous agreement between them and BP made when they set up TNK-BP. |
BP said it was disappointed at the decision, and hoped it could still go ahead with a share swap agreed with Rosneft as part of the deal. | BP said it was disappointed at the decision, and hoped it could still go ahead with a share swap agreed with Rosneft as part of the deal. |
"BP looks forward to finding a way to resolve its differences with its Russian partners to allow these important Arctic developments to proceed in future," said the UK oil firm in a statement on the arbitration panel's decision. | "BP looks forward to finding a way to resolve its differences with its Russian partners to allow these important Arctic developments to proceed in future," said the UK oil firm in a statement on the arbitration panel's decision. |
However, the UK firm faces an effective deadline for breaking the deadlock of 14 April, according to the BBC's business editor, Robert Peston. | However, the UK firm faces an effective deadline for breaking the deadlock of 14 April, according to the BBC's business editor, Robert Peston. |
That is the date on which BP's agreement with Rosneft must be consummated by, or else it will expire. | That is the date on which BP's agreement with Rosneft must be consummated by, or else it will expire. |
'Strategic alliance' | |
The oil giant signed the controversial new deal with its Russian state-owned counterpart in January, in order to exploit potentially huge deposits of oil and gas in Russia's Arctic shelf. | The oil giant signed the controversial new deal with its Russian state-owned counterpart in January, in order to exploit potentially huge deposits of oil and gas in Russia's Arctic shelf. |
But TNK-BP's Russian shareholders claimed BP broke an agreement to inform them of any other Russian oil business deals. | But TNK-BP's Russian shareholders claimed BP broke an agreement to inform them of any other Russian oil business deals. |
The "strategic global alliance" with Rosneft would have seen the UK and Russian firms exchange expertise in exploring the region. | The "strategic global alliance" with Rosneft would have seen the UK and Russian firms exchange expertise in exploring the region. |
As part of the deal, the pair had agreed that Rosneft would take 5% of BP's shares in exchange for approximately 9.5% of Rosneft's shares. | As part of the deal, the pair had agreed that Rosneft would take 5% of BP's shares in exchange for approximately 9.5% of Rosneft's shares. |
It is this share exchange that is said to have particularly upset TNK-BP's Russian shareholders. | It is this share exchange that is said to have particularly upset TNK-BP's Russian shareholders. |
The Alfa-Access-Renova (AAR) consortium, which represents the Russian shareholders, won a High Court injunction in London last month that put the BP-Rosneft deal on hold until the dispute could be resolved by arbitration. | The Alfa-Access-Renova (AAR) consortium, which represents the Russian shareholders, won a High Court injunction in London last month that put the BP-Rosneft deal on hold until the dispute could be resolved by arbitration. |
It was hoped that the joint venture might be given a role in the Arctic exploration deal, but TNK-BP's shareholders failed to agree on this. | It was hoped that the joint venture might be given a role in the Arctic exploration deal, but TNK-BP's shareholders failed to agree on this. |
The arbitration panel has now ruled that the temporary injunction "should continue" according to BP. | The arbitration panel has now ruled that the temporary injunction "should continue" according to BP. |
"Wilfully ignoring the provisions of the shareholder agreement was a serious misjudgement by BP that has severely damaged the relationship between the TNK-BP shareholders," said Stan Polovets, chief executive of AAR. | "Wilfully ignoring the provisions of the shareholder agreement was a serious misjudgement by BP that has severely damaged the relationship between the TNK-BP shareholders," said Stan Polovets, chief executive of AAR. |
"It has also harmed BP's reputation in Russia," he added. "We expect [BP chief executive] Bob Dudley to make every effort to rectify the situation and rebuild the trust that has been lost between BP, AAR and the management of TNK-BP." | "It has also harmed BP's reputation in Russia," he added. "We expect [BP chief executive] Bob Dudley to make every effort to rectify the situation and rebuild the trust that has been lost between BP, AAR and the management of TNK-BP." |