Analysts say TNK-BP dispute could end in sale to Gazprom

Deals

The ongoing dispute between Russian and British shareholders of oil company TNK-BP could lead to the company being bought up by a Russian state giant, most likely Gazprom but possibly Rosneft, analysts said.

TNK-BP’s American CEO, Robert Dudley, recently admitted major differences between Russian and British shareholders in the company’s strategic plans, and business daily Kommersant said on Monday that Russian shareholders were planning to replace Dudley with tycoon Viktor Vekselberg.

Alexander Kuznetsov, oil and gas analyst at Prospect Investment, told RIA Novosti: “There is a chance that TNK-BP shares will be sold to a Russian company - either Gazprom or Rosneft.” He said the sale could include shares of both Russian and British owners. Oil major BP has 50% in the company, Russia’s Alfa Group holds 25%, Viktor Vekselberg’s Renova 12.5%, and Leonard Blavatnik’s Access industries 12,5%.

Analysts say a 50% stake in TNK-BP would be worth $17-20 billion. Kuznetsov said: “British and Russian shareholders have different perspectives on the company’s future development. BP sees TNK-BP as its subsidiary, which should develop oil production and refining in Russia and CIS countries and should not venture outside this region.” “Russian shareholders believe the company should develop not only in Russia, but abroad, for example it should be able to produce crude in Iraq, and sell and refine oil in Eastern Europe. All these projects are in competition with BP, and BP doesn’t need this.”

TNK-BP has come under intense pressure from the Russian authorities this year. In March the Federal Security Service (FSB) searched the company’s headquarters and the Moscow office of BP, after a TNK-BP employee was arrested on suspicion of industrial espionage. Last week new searches were carried out at BP’s Moscow office. Konstantin Gulyayev, senior analyst at Region Group, said plans to sell the company are at the heart of the dispute between shareholders. “Some of them don’t see strong perspectives for development and want to sell their shares, for example to Gazprom, and others have different ideas, and want to develop the company further. I think it is all to do with this,” he said.

Kommersant reported on Monday that Russian shareholders had already held discussions with BP CEO Tony Hayward on changing the company’s management. BP told RIA Novosti, that it fully supports TNK-BP CEO Robert Dudley. “As far as Robert Dudley is concerned, BP fully trusts him. He is a proven and experienced oil industry manager with experience in Russia and abroad. The impressive results of his work at TNK-BP confirm this,” a company spokesman said. Any disagreements must be resolved through talks between shareholders, the company said. (rian.ru)

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