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Rosneft-BP deal failing

BP and Rosneft failed to agree on creating a strategic alliance by the set deadline; the deal was to see an asset swap and establishing a JV to operate in the Arctic. The sides could not find a solution either in the form of possible attraction of TNK-BP in Rosneft’s projects in the Arctic or in the form of buying out a stake of Russian shareholders in TNK-BP (also known as the AAR alliance) by the British firm or Rosneft. According to unofficial data, within the framework of the final proposal the 50% block of shares belonging to AAR was evaluated at $32bn, which was a very good premium to the market price.

However, developments show that receiving a large sum of money by Russian shareholders in TNK-BP possibly was not the main objective of AAR. Otherwise Mikhail Fridman and his AAR partners would have already agreed to beneficial financial proposals. It seems the conflict in fact cannot be settled by purely economic means.

It is not ruled out that ensuring access of Russian state companies to share capitals of major companies, the sanctum sanctorum of the Anglo-Saxon business, could be possible only by concluding some political agreements between Russian state authorities and western partners. In this case the AAR position could be suddenly adjusted.

By Stanistav Mitrakhovich, NESF leading expert

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