BP said yesterday it was considering a sale of its half-share of Russia’s third largest oil producer – TNK-BP – after receiving bid approaches.
It possibly heralds the end of one of the UK oil major’s most lucrative, audacious and troublesome ventures.
BP said it had received unsolicited approaches and notified its Russian partner, Alfa Access Renova (AAR), a group of four billionaires, of its intention to pursue a potential sale.
A spokesman declined to say which parties had made the approaches but, given Russian government’s desire to exert influence over the oil sector, speculation immediately focused on state-backed players such as Rosneft and Gazprom.
Sources said Rosneftegaz – the holding company for Russian oil giant Rosneft – had already offered to buy BP’s stake, estimated to be worth £19billion.
Mark Ireland, investment manager for Brewin Dolphin in Inverness, said: “The potential sale of BP’s share of TNK-BP somewhat caught the market by surprise.
“However, the proposed disposal has been viewed positively by investors who have been uneasy about the joint venture since 2008, when the Russian shareholders threatened to strip the BP-nominated directors of their powers.”
“BP will need to act quickly to replace the lost reserves and production as TNK-BP accounted for 29% of its production and 19% of earnings in 2011.”
On Monday, one of the AAR billionaires, Mikhail Fridman, resigned as chief executive of TNK-BP citing a breakdown in relations with BP.
The UK energy giant formed TNK-BP with AAR in 2003 to expand into Russia, one of the few major producing areas where foreign oil companies could invest.
Shortly after the venture was launched, the Kremlin became more hostile to foreign and private-sector investment.
Periodic spats between the co-owners have also led to worries that BP could lose its interest with little or no compensation.
BP and Rosneft offered to buy out AAR for about £20billion last year as part of an attempt to salvage their Arctic exploration tie-up, which the billionaires had blocked. TNK-BP has exploration and production assets plus downstream marketing operations in Russia and Ukraine, alongside interests in Brazil, Venezuela and Vietnam.