BP ready to sell off Russian joint venture

LONDON - Agence France-Presse

Mikhail Fridman, the head of British-Russian oil venture TNK-BP is pictured.

British energy giant BP on June 1 said it was ready to offload its stake in troubled Russian joint venture TNK-BP after the shock resignation of the partnership’s chief executive earlier this week.

“BP announced today that it has received unsolicited indications of interest regarding the potential acquisition of its shareholding in TNK-BP,” it said in a statement, adding that BP intended “to pursue a potential sale”.

The May 25 resignation of Russian tycoon Mikhail Fridman as TNK-BP head threw one of BP’s most profitable overseas operations into turmoil. Fridman warned on May 31 that the lucrative nine-year alliance was paralyzed and needed one of two main partners to take full charge. BP’s 50-percent stake has a market value of about $18 billion and would help it to meet massive compensation costs resulting from the 2010 Gulf of Mexico oil spill disaster.

Shares in BP jumped 2.82 percent to 406 pence after its announcement on June 1, while London’s benchmark FTSE 100 index was down 0.26 percent at 5,307 points in morning deals. “BP was the stock in focus within the FTSE,” said Shavaz Dhalla, a trader at Spreadex.

“However, investors should remain cautious as there are still uncertainties concerning the actual value of BP’s stake and whether this sale will in fact be enough to finally cover the Gulf of Mexico spill costs.” Fridman meanwhile added on May 31 that tensions within TNK-BP -- Russia’s third-largest oil producer -- had been building since BP’s failed bid last year to form an Arctic alliance with the Russian state-owned company Rosneft.

He said that the four Soviet-born billionaires who own half of TNK-BP through a consortium known as Alfa Acess Renova have been trying to get disputes settled by the appointment of independent directors to the board. But Fridman accused BP of dragging its feet on those nominees out of fear that the new board members would side with the Russian tycoons.

BP said in its statement on June 1: “In light of these unsolicited approaches (for TNK-BP) and consistent with its commitment to maximizing shareholder value... BP has notified Alfa Access Renova of its intention to pursue a potential sale.