BP admits oligarchs may hold up Rosneft deal

1st Feb 2011 13:49

BP today admitted legal action taken by its Russian partners could delay the British company's $8bn Arctic exploration deal with Kremlin-backed Rosneft. A London court will today hear an action launched by Alfa-Access-Renova (AAR), the vehicle owned by a number of Russian oligarchs and which has a 50% stake in TNK-BP. They want to stop the deal with state-run Rosneft, agreed on 14 January, claiming it breaches terms of their own joint venture with the UK firm that includes a clause giving them the right to be part of any action on Russian soil. "This hearing may result in an order which impacts or delays the completion of the share swap agreement announced by BP and Rosneft," BP said Tuesday."BP intends to resist this application in court and the likely outcome of these proceedings is not yet known. There are also related pending arbitral proceedings."The billionaires have already flexed their muscles, yesterday voting against a $1.8bn fourth quarter dividend earmarked for TNK-BP. That could cost BP around $900m.It's also been revealed today that BP looked into doing deals with "rogue states" like Burma, Cuba and Sudan via TNK-BP.It eventually vetoed the idea, but the oligarchs, especially TNK-BP director German Khan, were so keen the projects they were farmed out to one of Khan's own companies.