BP will press ahead and sell a stake in its Russian venture, a source close to the company said, despite a threat by its billionaire partners to block a deal that could pave the way for the Kremlin to cement its dominance over the country’s vast energy sector.
BP said on Friday it had received expressions of interest in its one-half stake in TNK-BP, Russia’s third-largest oil producer that analysts estimate is worth US$30 billion, and would pursue a sale.
A successful sale of TNK-BP to the state would raise the government-controlled share of Russia’s oil production to more than 50 percent and mark a major victory for the Kremlin’s drive to strengthen its grip on strategic natural resources a matter of weeks after Vladimir Putin returned to the presidency.
It would also sideline the four billionaires who thwarted an earlier tie-up between BP and state company, Rosneft.
“We can sell it if we want to,” the BP source said in response to reports that the AAR consortium, which represents the quartet of Russian oligarchs, would seek to veto any deal.
Sources familiar with the matter said BP has been approached by state energy holding firm Rosneftegaz, which controls a stake of more than 75 percent in Rosneft, Russia’s largest oil company.
Former Russian deputy prime minister Igor Sechin, a Putin ally who has led strategy at Rosneft for the best part of a decade, was recently named chief executive at the state oil firm and sources say has been handed a mandate to build a national oil champion capable of competing on a global scale.
The state approach has put AAR — led by banking-to-retail tycoon Mikhail Fridman — under pressure after it took legal action last year to prevent BP from signing a major offshore exploration and US$16 billion share-swap deal with Rosneft.
Fridman resigned as chief executive of TNK-BP a week ago, throwing the company deeper into a crisis of corporate governance that has left its board inquorate and blocked the payment of dividends.
Industry and political sources say the oligarch shareholders last year lobbied Dmitry Medvedev, then Russian president and now prime minister, to oust Sechin as chairman of Rosneft.
With Putin back in the Kremlin and Sechin in control of Rosneft, it appears increasingly likely that the state will assume control of TNK-BP — either by buying out BP or the oligarchs.
“The end game is that the state buys [TNK-BP],” a veteran Moscow-based executive said. “The issue is that Fridman overplayed his hand a couple of times.”
Some industry sources say that BP may end up striking a broader partnership with Rosneft along the lines of big offshore exploration deals struck recently by the Russian oil major with ExxonMobil, Eni and Statoil.
Meanwhile, sources close to AAR have said that the consortium would be willing to buy out BP for a consideration of US$25 billion.
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS