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Oil divorce

The cash pile potentially could also make BP a merger/bid target again, with old sparring partners Shell a possibility.

ALEX BRUMMER: Dark financial clouds over the Diamond Jubilee

By Alex Brummer: PUBLISHED: 22:06, 1 June 2012

Oil divorce

Political risk is part of what oil companies do. So it is somewhat surprising that BP’s board, chaired by keen yachtsman Carl-Henric Svanberg, has decided to cut and run from TNK-BP.

This despite the fact that it has been such a profitable asset, helping to keep the cash flowing while the Gulf of Mexico oil disaster has been playing itself out.

However, the relationship with Mikhail Fridman and the other oligarchs running AAR, BP’s Russian partner, has become toxic. The constant threat of legal action against BP is an uncertainty it could do without, and the TNK-BP relationship has proved a bar to keeping on the right side of President Putin’s autarchy and in particular Rosneft and the path to Arctic exploration.

If BP is able to pocket the $30billion to $35billion expected from the sale it could open all kinds of new frontiers in more promising territories including the Russian Arctic. That should keep chief executive Bob Dudley active.

The cash pile potentially could also make BP a merger/bid target again, with old sparring partners Shell a possibility.

COMPLETE ARTICLE: ALEX BRUMMER: Dark financial clouds over the Diamond Jubilee

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