Rosneft’s Vanknor oil field in eastern Siberia.
Rosneft and BP will cooperate to explore the
Russian arctic.
The British oil giant BP agreed on Friday to a
partnership with Rosneft, a Russian company,
forming an alliance to explore the Russian Arctic.
In a share swap under the partnership
agreement, the state-owned Rosneft would hold
a 5 percent stake in BP while BP would hold 9.5
percent of Rosneft. The deal is worth about $7.8
billion.
The two companies would explore three license
blocks on the Russian Arctic continental shelf that
were awarded to Rosneft last year and span
about 50,000 square miles.
The deal is a coup for Robert Dudley, an
American who took over as chief of BP in
September and had pledged to rebuild the
company ’s reputation after the immense oil spill
in the Gulf of Mexico.
To help cover the estimated $40 billion in damage
claims resulting from the spill, BP has moved to
sell about $30 billion in assets, including Pan
American, an oil producer in Argentina, to the
Bridas Corporation for $7.1 billion. That deal,
announced in November, put BP ’s total asset
sales at about $21 billion. BP has also sold assets
in Pakistan, Venezuela, Vietnam and the United
States.
The agreement allows BP to expand its operation
in Russia at a time when the demand for energy
is rising and competition to explore new fields is
heating up.
“We are very pleased to be joining Russia’s
leading oil company to jointly explore some of
the most promising parts of the Russian Arctic,
one of the world ’s last remaining unexplored
basins,” Mr. Dudley said in a statement.
“This unique agreement underlines our long-
term, strategic and deepening links with the
world ’s largest hydrocarbon-producing nation,”
he added.
The deal drew immediate calls for a review by a
lawmaker in Washington, who noted that BP was
the top petroleum supplier to the United States
military in 2009.
The lawmaker, Representative Edward Markey of
Massachusetts, who is the top Democrat on the
House Natural Resources Committee, called for a
thorough analysis of the deal.
“If this agreement affects the national and
economic security of the United States, then it
should be immediately reviewed by the
Committee on Foreign Investment in the United
States, ” Mr. Markey said in a statement.
“Additionally, the U.S. State Department should
closely monitor this transaction.”
The foreign investment committee is coordinated
by the Treasury and has the authority to examine
foreign purchases of stakes in American
companies and to block deals that threaten
national security.
“This acquisition will almost certainly complicate
the politics of levying and collecting damages
from BP following their Gulf of Mexico oil spill,”
Mr. Markey said.
As part of the agreement, Rosneft and BP will set
up an Arctic technology center in Russia “to
develop technologies and engineering practices
for the safe extraction of hydrocarbon resources
from the Arctic shelf, ” the companies said in a
joint statement.
Russia’s prime minister, Vladimir V. Putin, said
that he supported the partnership and that his
government could back the drilling project in the
Arctic Ocean with tax breaks, Bloomberg News
reported.
The agreement was negotiated by Mr. Dudley
and Igor Sechin, Russia ’s deputy prime minister
and Rosneft’s chairman. BP’s chairman, Carl-
Henric Svanberg, said BP’s board “believes that
the combination of assets and skills will unlock
significant value and thus the issue of shares to
Rosneft is in the interests of all shareholders. ” BP
and Rosneft said they viewed their stakes in each
other as “long term and strategic.”
BP and Rosneft have cooperated on projects in
the past. They explored deposits off Sakhalin
Island in Russia and became partners at the
German Ruhr Oel refiner after Rosneft bought the
stake BP did not own.
The new partnership showed that Mr. Dudley
was able to keep his strong ties in Russia even
after he was removed as head of BP ’s Russian
joint venture, TNK-BP, three years ago after BP
fell out with its Russian billionaire partners.
Mr. Dudley was named chief executive of BP after
his predecessor, Tony Hayward, stepped down
after the explosion in the Gulf of Mexico that killed
11 workers and caused tens of billions of dollars in
damage. In his first step as chief executive, he
reorganized the company’s critical exploration
and production business, removing the unit’s
head, and set out to establish a global safety
division.
BP had a net profit of $1.79 billion in the third
quarter of last year, down from $5.34 billion a
year earlier, after it set aside additional money to
cover the costs of the oil spill.
Rosneft produces some 2.4 million barrels of oil
equivalent, making it the country ’s top producer,
and has annual pretax profit of about $8.5 billion.
Source: Http://www.nytimes.com/2011/01/15/business/global/15oil.html?_r=1&src=busln
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