BP’s billionaire partners in TNK-BP said they want to sell or list their 50 per cent stake in the business, creating a new wave of uncertainty over the future of Russia’s third-largest oil producer.
BP confirmed that its partners, grouped together in a consortium known as AAR, had served notice that they intend to dispose of their shares in the 50:50 joint venture to a third party, or through an initial public offering.
Under the shareholder agreement between the two partners, BP now has 45 days to respond.
The move adds a new level of complexity to the situation around TNK-BP, four months after BP announced it was putting its own stake in the company on the block. It is now locked in talks on a sale with both AAR and Rosneft, the national oil champion.
A BP spokesman said the company would continue the process of selling its stake, regardless of the AAR move. He said the company expected to receive formal offers from next week, when a 90-day period for good-faith negotiations with AAR expires.
Created in 2003, TNK-BP is one of BP’s most lucrative investments, but its commercial success has been overshadowed by a long string of bitter disputes between BP and AAR that at times paralysed corporate governance at the company.
TNK-BP’s then chief executive Bob Dudley – now CEO of BP – was forced to leave Russia at the climax of one particularly bitter row in 2008.
AAR has appointed Rothschilds to advise on the financing of an all-cash bid. Rosneft has also approached lenders, and it is believed it could pay $20bn for the BP stake in cash and shares.
Last month, Bob Dudley and BP chairman Carl-Henric Svanberg told Russian President Vladimir Putin that BP would use some of the proceeds from the sale of its stake to buy shares in Rosneft, in which it already owns about 1.4 per cent.
But a Rosneft acquisition could prove awkward for AAR, which would end up in a 50:50 partnership with a powerful state firm that dominates the oil sector.
Stan Polovets, chief executive of AAR, said that by announcing their intention to sell, the Russian shareholders were trying to achieve maximum optionality in the event Rosneft acquires BP’s stake.
“From our perspective we would become a financial investor in a company without any liquidity,” Mr Polovets said.
AAR’s move also means that if BP does not receive any attractive offers for its stake in TNK-BP and decides against selling it, the oligarchs can also sell out. Under that scenario, Rosneft might buy the AAR stake and BP and Rosneft would then become 50:50 partners in TNK-BP, said a person familiar with the matter.
The person dismissed the idea of a TNK-BP IPO, calling it an “irrelevance”.
But others thought it could be floated. “TNK-BP is a competitive business versus its Russian and global peers, with an exceptional asset portfolio offering considerable growth potential and thus an attractive public market investment story,” said David Waring, head of energy at M&A advisory boutique Evercore Partners.
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