Posts Tagged ‘TNK-BP’

By Joe Carroll and Edward Klump on October 22, 2012

Now that BP Plc (BP/) has partnered with Russia’s Vladimir Putin to oversee the world’s second-biggest oil industry, other international energy companies such as Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc (RDSA) are facing dwindling access to one of the last untapped troves of crude.

BP’s agreement yesterday to sell its half of Moscow-based TNK-BP to Russia’s state-run oil company, OAO Rosneft (ROSN), for $12.3 billion in cash and almost one-fifth of Rosneft’s shares vaulted the U.K. energy producer to preeminence among foreign drillers in the Russian oil patch, said Pavel Molchanov, an analyst at Raymond James & Associates Inc. in Houston. read more

By John Donovan

In an articled published today by The Sunday Times (Page 8 of Business Section), Danny Fortson has revealed that according to senior bankers, Exxon Mobil and Shell are both considering opportunistic bids for BP. 

The two thirds of a page article is published under the headline “Is the sun setting on BP?” and argues that BP is “vulnerable” as a result of a downsizing policy by BP’s Chief Executive.

Danny Fortson warns: “Bod Dudley may be playing a dangerous game. Shrinking the oil giant will make it more attractive to rivals…” read more

Dr Shamil Yenikeyeff analyses the reasons for the collapse of BP’s Arctic partnership with the Russian state company Rosneft. He argues that the BP–Rosneft deal was inauspicious even before it was signed due to the history of the Kremlin’s reluctance to back BP plc in its often uneasy relations with the AAR consortium – BP’s Russian partners in the TNK–BP joint venture. Dr Yenikeyeff analyses the motives of the key players involved and looks at the possible future of BP’s involvement in Russia. read more

PETROLEUM ECONOMIST

A new book tells the story of the oil industry’s boom-bust cycle through the personalities of its main protagonists. It isn’t always a flattering portrait, writes Derek Brower

The book is especially strong on such juicy details, not least when it describes the machinations – rivalries, personality clashes and egos at work – during the mega-merger period of the late 1990s. Browne’s successor, Tony Hayward, is seen entertaining Gazprom boss Alexei Miller at a Chelsea football match in London. Shell’s former chief, Jeroen van der Veer, argues in German, without interpreters, with Russia’s then president Vladimir Putin about the Sakhalin Energy project at a private function in Holland. And so on. read more

Only three years ago, Shell, the world's biggest oil company, was forced to give up control of the giant Sakhalin development, handing over half of its interest to Gazprom after a dispute over costs and the environment.

Royal Dutch Shell executives publicly complained about the rule earlier this year. The company's director for exploration and production, Malcolm Brinded, said in February that foreign investors wanted more confidence about accessing the oil and gas riches they discover.

Analysts said the Gazprom Neft bid will be good news for Royal Dutch Shell PLC, the Anglo-Dutch supermajor that is Sibir's 50-50 partner in the Salym field. Shell would prefer to have Gazprom as a partner there over BP, one of its main rivals.

Sibir also owns a 50 per cent stake in a joint venture with Royal Dutch Shell to develop one of Russia's most promising fields, Salym, where production hit 80,000 barrels a day in January.

TNK-BP, the Russian oil venture half owned by BP, is launching a bid for a significant minority stake in Sibir Energy, the Aim-listed energy group dogged by corporate governance issues.

Now the company appears to be a takeover target. Earlier this month it denied reports it had received a bid approach from TNK-BP, which was said to be planning a £2.3bn offer. But it now seems there was something concrete behind the tale after all

“It seems like a more natural buyer would be Royal Dutch Shell or Gazprom Neft because they already have partnerships,” Chirvani Abdoullaev, senior oil analyst at Alfa Bank in Moscow, said by telephone today.

BP and its Russian partners in the TNK-BP joint venture have signed the peace deal they agreed in principle in 2008, weakening the British group’s grip on the company.

Dudley's resignation, effective from Dec. 1 of this year, follows a protracted struggle between the firm's British and Russian shareholders and was part of an agreement reached between BP and Alfa Access-Renova, the vehicle representing the four Russia-connected billionaires who own the other half of TNK-BP.

TNK-BP, half owned by oil major BP (BP.L: Quote, Profile, Research,Stock Buzz), has become the first oil producer to cut its staff, the daily says reporting on sacking of 390 managers in the head office in Moscow. (ROSSIISKAYA GAZETA)

REUTERS ARTICLE

MOSCOW (Reuters) - Russia's TNK-BP, half-owned by oil major BP is cutting downstream business staff at its head office and expects oil production to suffer if oil prices do not recover in 2009, a company executive said on Thursday.

Leading Russian oil producers, including TNK-BP, BP's Russian affiliate, are grappling with a collapse in profits from the export of Siberian oil.

Mitvol was appointed deputy head of the environmental regulator in April 2004, but came to international attention in late 2006 when he led a campaign against oil major Shell that resulted in a lucrative project being sold to Gazprom.

Gazprom, the state-controlled Russian gas group, is threatening to pull out of a deal to buy a stake in a vast east Siberian gas field from TNK-BP, BP’s Russian joint venture, saying the stake is likely to be worthless.

The bruising battle for control of the TNK-BP joint venture, Russia's invasion of Georgia and a growing fear of government interference in business have left western investors wondering whether debt payment could be used as a political lever, bankers and analysts said.

Investors have been shedding their exposure to the Russian market, taking fright initially from the power struggle at TNK-BP and latterly from the falling oil price and the conflict in Georgia.

Bankers say Russia is facing its worst crisis since the August 1998 default. The Russian stock market has plummeted more than 40 per cent since May. The conflict with Georgia was the final straw...

BP risks confrontation with another arm of the Russian government after the head of the natural resources ministry warned that the UK oil company must agree a gas field deal with Gazprom by the end of the year.

Shell handed over a large share of its Sakhalin gas field business to the state-owned Gazprom after destabilising criticism from regulators.

A long-running dispute over control of TNK-BP, accusations of government fraud by Hermitage Capital, the investment fund, and Vladimir Putin’s crackdown on Mechel, the steel company, for alleged price-fixing has made investors worry about the stability of the Russian business environment.

...Robert Dudley, the BP-appointed chief executive of the company, was forced to flee Russia to a secret location in central Europe after what BP called an “orchestrated campaign of harassment”...

The exodus of cash has been prompted by concerns over a series of problems, including Russia's conflict with Georgia and the clash between several oligarchs and BP over the TNK-BP joint venture.

Plans by energy giants BP and Gazprom to exchange assets in Russia and create an international alliance for investments around the world have been shelved.

The UK company has bowed to pressure from its Russian partners...

BP, whose shares rose 4 per cent on news of the deal, appears to have bowed to many of the Russian shareholders’ demands by agreeing that Robert Dudley, the chief executive of the joint venture, would leave by the end of the year.

MOSCOW -- BP Plc is expected to sign a deal later Thursday settling a bitter conflict with its Russian partners in TNK-BP Ltd., a person close to the British company said.

The deal is critical to BP which has seen its shares suffer from the dispute. “This is a much better outcome for BP than people had expected,” said a senior oil industry executive.

BP is poised to resolve a bitter dispute at TNK-BP, its Russian joint venture, that has caused a political firestorm and threatened the British oil group's future in the region.

As S&P cut BP's ratings, it boosted the credit status of its arch-rival Royal Dutch Shell, raising Shell's long-term credit rating to AA+ from AA.

At stake, at the very least, is the management structure of the company and who will fill the position of Bob Dudley, TNK-BP chief executive, who last month fled Russia...

The crisis at TNK-BP, which produces a quarter of BP's worldwide oil output, hit the headlines after BP accused the Russian side of using 1990s-style corporate raider tactics to grab control of the venture.

Speculation was also growing yesterday about progress on another "cold war" front - the long-running dispute between four Russian oligarchs and BP over the future structure and control of the TNK-BP joint venture in Russia.

MOSCOW -- BP PLC's Russian joint venture, TNK-BP Ltd., said the head of its downstream business had resigned, becoming the second senior manager to leave the troubled oil firm this month.

BP suffered a further blow to its influence over its Russian joint venture TNK-BP on Monday when one of its senior appointees resigned, joining the growing list of managers to leave the troubled oil producer.

Anthony Considine, the company’s head of downstream business, responsible for its oil refining, trading and marketing businesses, is leaving after five years to “pursue other opportunities” as the battle for control of the business escalates.

Although BP still backs Mr Dudley as chief executive of TNK-BP, it has admitted that he cannot continue in the job indefinitely if he is unable to return to Moscow.

Robert Dudley, the chief executive of TNK-BP who was forced into exile, has struck out against the Russian authorities in a public letter accusing them of abusing their powers.

The row over TNK-BP, a government attack on the steelmaker Mechel, falling oil prices and the invasion of Georgia have driven the RTS index down from 2,303 on June 30 to 1,707 last night.

Analysts still feel the dispute is likely to be resolved by a Russian state-controlled company taking a majority stake in the company. Gazpromneft and Rosneft, both of which are controlled by the Kremlin, are thought to be potential buyers.

BP has to accept the fact that it will lose control of the joint venture and probably sell it to another Russian company, such as OAO Gazprom, Mr. Gheit said.

A Moscow court suspended Robert Dudley as chief executive of TNK-BP for two years in a big blow to BP’s involvement in Russia’s second largest oil company.

News of the extraordinary meeting, to be held on September 25, emerged as BP was dealt a fresh blow in its attempt to maintain control of TNK-BP after a Moscow court banned Bob Dudley, the joint venture’s chief executive, from working in Russia for two years.

After corporate warfare, real war.

BP is facing a second front in the former Soviet Union after Russian jets were reported to have launched a bombing raid on its main pipeline in Georgia, raising fears that Moscow was moving to increase its stranglehold on Europe's energy supplies.

The Kremlin is paranoid about the energy resources on which so much of its power depends: witness its acquiescence in the seizure of control of BP's Russian joint venture, TNK-BP, which Russian oligarchs pulled off with impunity...

The pipeline is 30 per cent owned by BP and supplies 1 per cent of the world’s oil needs, pumping up to a million barrels of crude per day to Turkey.