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Outlook For Oil Remains Grim Despite 90% Rally

Outlook For Oil Remains Grim Despite 90% Rally

Oil staged an incredible comeback…

James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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Rosneft to Dominate Russian Energy Industry if Offer for TNK-BP is Accepted

According to Bloomberg, Rosneft is set to overtake Gazprom and become the largest oil and gas company in Russia if BP accepts its offer to buy their 50 percent stake in the oil company TNK-BP.

The offer, rumoured to be worth over $25 billion and consist of a mixture of cash and stock options, will be considered today at a BP’s board members meeting. A $28 billion offer has already been made to BP’s partners in TNK-BP, the AAR.

A source close to the deal has commented that, “the offer is in. It's a split of the two, (cash and shares). It's a clean offer and there's no other plan on the table. If he thinks it's the best offer Dudley (Bob Dudley, chief executive of BP) will recommend it but the board may say we need to reconvene and consider this aspect or that. It's not an automatic tick in the box.”

If Rosneft manages to purchase full control of TNK-BP the new company would have a production rate of over 4 million barrels of oil and gas a day.

Related Article: Don't Bet Against Shale Gas

The deal that Rosneft offered to the AAR is based upon an offer that was made last year. Rosneft place a bid then in order to create a partnership with BP and create a deal to explore the Arctic together. However the AAR blocked the deal, claiming that it violated a TNK-Exclusivity agreement. BP then added their support to the deal and increased the offer to the AAR to $32 billion, yet this too was rejected.

Now that the AAR seem interested in the new deal some speculate that BP could reject the offer they have received in order to form a partnership with Rosneft and continue with the Arctic plans started last year.

By. James Burgess of Oilprice.com



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