• 4 mintues Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Forecasts for oil stocks.
  • 9 minutes Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 13 minutes European gas market to 2040 according to Platts Analitics
  • 8 mins Simple question: What is the expected impact in electricity Demand when EV deployment exceeds 10%
  • 1 hour America's pandemic dead deserve accountability after Birx disclosure
  • 8 hours Putin blocks Ukraine access to Black Sea after Joe blinks
  • 8 hours U.S. Presidential Elections Status - Electoral Votes
  • 19 hours Today Biden calls for Summit with Putin. Will Joe apologize to Putin for calling him a "Killer" ?
  • 2 days Fukushima
  • 2 days CO2 Mitigation on Earth and Magnesium Civilization on Mars – Just Add Water
  • 9 hours Biden about to face first real test. Russia building up military on Ukraine border.
Lithium Mega-Merger Creates New $3 Billion Company

Lithium Mega-Merger Creates New $3 Billion Company

Australian lithium miners Galaxy Resources…

Oil And Gas Bankruptcies Jump Despite Rise In Crude Prices

Oil And Gas Bankruptcies Jump Despite Rise In Crude Prices

Oil prices have risen significantly…

This Strategic Shift Could Make Big Oil Much More Profitable

This Strategic Shift Could Make Big Oil Much More Profitable

After years of dilly-dallying, oil…

Gregory Feifer

Gregory Feifer

Gregory is a Contributor to Radio Free Europe / Radio Liberty

More Info

Premium Content

BP's Arctic Oil Exploration Deal Dealt a Blow

A Swedish arbitration panel has dealt the BP energy company a setback by blocking a major deal with Russia's Rosneft to explore oil reserves in the Arctic.

BP signed the $8 billion deal with state-controlled Rosneft last January to develop massive oil deposits under the Arctic Kara Sea. It includes an agreement to swap shares between the two companies.

But the deal was opposed by the Russian partners of BP's joint venture, TNK-BP, which is not part of the agreement and filed the suit. A group of powerful billionaires who own 50 percent of TNK-BP say the Rosneft deal violates the joint venture's shareholder agreement, which stipulates BP must pursue business in Russia together with them.

The Russian partners proposed letting TNK-BP take BP's place in the deal, which the British-based company declined. The billionaires then appealed to a Swedish arbitration tribunal in London.

Its decision on March 24 to block the deal is a blow to BP, which looked to its deal with Rosneft to secure future growth as it emerges from last year's disastrous Gulf of Mexico spill, when some questioned the company's very survival.

Some believe TNK-BP is merely looking for compensation, or even a buyout. Stan Polovets, chief executive of the Alfa-Access-Renova (AAR) consortium, which represents the Russian shareholders, said in a statement following the arbitration panel's ruling that "Willfully ignoring the provisions of the shareholder agreement was a serious misjudgment by BP that has severely damaged the relationship between the TNK-BP shareholders."

But BP says it's not giving up on its deal with Rosneft. In a statement posted on its website, the company said, "BP looks forward to finding a way to resolve its differences with its Russian partners to allow these important Russian Arctic developments to proceed in future."

Deal Unlikely To Be Off

Russia provides a quarter of BP's entire oil output, and the Arctic reserves are seen as critical to future production. BP is under pressure to break the deadlock by April 14, when the Rosneft deal is set to expire -- if it doesn't go ahead.

But analysts believe the deal will eventually go ahead because Rosneft, Russia's No. 1 oil producer, has the government's backing.

Aleksei Kokin, an oil and gas analyst UralSib financial corporation, says blocking the deal completely would benefit none of the participants. He says it's more likely AAR is seeking compensation.

"It could be limited to the sale of some TNK-BP shares to BP, or a financial settlement," Kokin says. "The most extreme possibility is BP's full buyout of TNK-BP."

Kokin says it's unlikely AAR wants TNK-BP to take part in the Rosneft deal, because "Rosneft doesn't want a Russian-based company to take part."

Industry analysts say the deal fits a broad Kremlin strategy to boost its political influence abroad by signing lucrative deals with energy companies in countries across Europe.

U.S. diplomatic cables leaked on the WikiLeaks website have also indicated Rosneft may soon take over TNK-BP.

By. Gregory Feifer

Source: RFE/RL 

Copyright (c) 2010. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News