A Siberian court has ruled that the oil giant, BP, must pay its joint venture partner, TNK-BP $3billion (£1.8bn) in damages because of an aborted deal in which they were going to partner Russia’s state oil firm, Rosneft, in an Arctic exploration. BP plan to appeal against the ruling and a lawyer for the company said that the reputation of the Russian judiciary has been badly damaged.
BP badly wants to get out of Russia and Rosneft is the only company showing any interest in buying BP’s 50 percent stake in TNK-BP which is worth nearly $30 billion. Andrey Prokhorov is the minority shareholder who brought the case to court because he claimed that a link between BP and Rosneft lowered the value of TNK-BP.
TNK-BP is a partnership between BP and a bunch of Russian oligarchs, Alfa Access Renova. This is the fourth time that Prokhorov has brought the case to court and at last he has been successful after the previous three cases were thrown out. The trouble all started last year when AAR were not happy about the proposed joint Arctic exploration by BP and Rosneft.
Rosneft were going to get 5 percent of BP’s shares and BP 9.5 percent of Rosneft’s shares. AAR, however, obtained an injunction to stop the deal because they claimed that it broke the TNK-BP shareholder agreement. This agreement said that Russian opportunities should be shared together.
A proposed deal last year in which BP and Rosneft, as partners, would buy out AAR for $32 billion came apart right at the last minute. The situation now is that BP is in a ninety day buyout period. This is so that the company can hold negotiations with Rosneft and AAR to try and thrash out some sort of deal which will suit all of them.