TNK-BP boss leaves the door open for Russian deal

BP's relations with its Russian JV partner are clearly at rock-bottom. Can anything except cold hard cash resolve them?

by James Taylor
Last Updated: 19 Aug 2013
There's an interesting interview on the BBC today with Viktor Vekselberg, one of the oligarchs behind AAR, BP's joint venture partner in Russia. Vekselberg makes it very clear just how much damage this proposed Rosneft tie-up has done to BP's existing Russian relationship - but he also hinted at a possible solution, by admitting that he and his partners were open to offers for their share of the JV. The trouble if, if they want half as much again as BP is prepared to pay, that's not much of an olive branch...

Vekselberg told the BBC he was surprised that BP tried to pursue a deal with Rosneft - not surprised that it sought a state-backed partner, but surprised that it decided 'to do something not according to our shareholders agreement'. And the courts seem to share this surprise, given that they've so far concurred with the AAR oligarchs that BP is in breach of said agreement. 'I was very upset,' he told the Beeb plaintively. 'I am still upset even now.' The fact that he's even talking about this in the media shows how bad relations have now got between BP and AAR.

But is he also trying to offer some hope of a resolution? Well, he does at least suggest the oligarchs have no 'ideological' objection to selling their stake; they're 'businessmen', so they're open to any 'interesting proposal' (because as we all know, there are few people in business more highly principled than Russian oligarchs). Since BP would obviously love nothing more than to buy them out and press ahead with the Rosneft deal, that does represent a slim ray of hope.

Only a slim one, though. Vekselberg points out that he doesn't exactly need the money, and will be 'double upset' to sell a company he's been building up for years. And even if BP's piles of cash can assuage his finer feelings, the problem will be that the two sides seem to be miles apart on valuation - AAR apparently thinks $70bn, where BP reckons it's more like $50bn. That's quite a big gap. And it's clear that there won't be a lot of goodwill for BP to utilise in its efforts to bridge that gap.

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