Oil giant BP has moved closer to tying up a deal with Russian firm Rosneft after its current partners in the country dropped their opposition to the agreement yesterday.
It is understood the AAR consortium of billionaires – BP’s partners in its TNK-BP joint venture – accepted a £205million payoff to end the legal battles which have held up a potential deal between BP and the Russian state-backed company.
It comes after Rosneft agreed to buy BP’s 50% stake in TNK-BP for £10.7billion in cash and £6billion worth of Rosneft shares, which would leave BP with a 19.75% stake in Rosneft.
Rosneft also signed a memorandum of understanding to buy out the AAR consortium for £17.4billion in cash in a separate transaction.
The deals will make Rosneft the dominant producer in the world’s second-largest oil exporting country.
Until yesterday’s agreement, BP had been unable to discuss its plans to work alongside Rosneft because of legal wrangle in London.
Now, it will be able to consider the secondment of BP engineers, exploration projects and other proposals with its new partner, including potentially reviving plans to explore the Russian Arctic.
David Peattie, head of BP Russia, said: “Today’s agreement allows both AAR and BP to move forward and focus on the future.
“BP will be able to concentrate on the sale of our interest in TNK-BP to Rosneft and on working more closely with them as we develop the next stage of BP’s long involvement in Russia.”
The legal disputes had centred on claims by AAR that BP breached a shareholder agreement making TNK-BP its sole vehicle in Russia when it first tried to strike a deal with Rosneft last year.
AAR chief executive Stan Polovets said: “The settlement enables BP and AAR to focus on issues that are most important at this stage; closing our respective transactions with Rosneft and ensuring that TNK-BP continues to operate at world-class levels during the transition period that lies ahead.”