Russia's Prime Minister, Vladimir Putin, has promised to give BP "the most favourable tax treatment" in the Arctic as its £10bn deal with the Kremlin was greeted with cautious optimism by investors yesterday. Late on Friday night, BP agreed to issue £5bn of shares to Russian state-backed oil company Rosneft, giving it the second-largest stake in the British company. Both the British Prime Minister and Mr Putin have backed the alliance that will see the two companies collaborate on difficult Arctic drillin, the Sunday Times reports.BP boss Bob Dudley has not ruled out Russia's Kremlin-controlled oil giant Rosneft adding to its 5% stake in Britain's most important oil and gas company. His remarks came as both companies signed a $16bn (£10bn) share swap deal that gives BP a 9.5% share of Rosneft and opens the way for the British oil giant to exploit one of the world's biggest potential oil and gas fields - in Russia's Arctic, the Sunday Mail writes.The Arctic is to become the "new environmental battleground", campaigners warned yesterday after BP announced plans to drill in one of the last great unspoilt wildernesses on earth. Greenpeace and the World Wide Fund for Nature (WWF) have vowed to confront BP's American boss, Bob Dudley, over the agreement with the Russian state-owned oil giant Rosneft to explore the Kara Sea, north of Siberia. The British energy firm was branded the world's "environmental villain number one" by Friends of the Earth (FoE) yesterday in response to its move to exploit potential oil reserves in the remote waters, the Independent adds.Meanwhile, America has lashed out at BP's landmark deal to make Rosneft, the Kremlin-controlled oil giant, the FTSE 100 firm's largest shareholder. Michael Burgess, a Republican congressman from Texas, yesterday called for an inquiry on grounds of national security. "The national security implications of BP America being involved with the Russian company ? that does require scrutiny," he said. The deal makes Rosneft, 85% controlled by the Kremlin, BP's single largest shareholder. Its next biggest investor is Legal & General, the insurance group, the Sunday Times reports.One of America's biggest healthcare companies is examining a fresh takeover approach to Smith & Nephew, the FTSE 100 maker of hip and knee replacements. Johnson & Johnson, the pharmaceuticals giant, is understood to be weighing a formal offer after a tentative approach was rejected last year. Its plans have put S&N's board, led by chief executive David Illingworth, on red alert, and the group's advisers have begun preparing a defence. A revised bid is expected to be worth at least 800p a share, valuing S&N at just over £7bn. The earlier approach was pitched at 750p a share, the Sunday Times reports.Three former bosses of Britain's biggest banks have secured lucrative agreements allowing them to take millions of pounds in pay and benefits months after they step down. Consultancy contracts have been handed to John Varley, the former chief executive of Barclays; Michael Geoghegan, who recently quit as chief executive of HSBC; and Eric Daniels, who is poised to stand down as chief executive of Lloyds, which is 41%-owned by the taxpayer. The three will continue to receive the same salary and in some cases benefit from pension payments and share awards. They stand to pocket a total sum of more than £3m, in addition to existing pension and bonus arrangements worth tens of millions of pounds. The payments come as the banks near an agreement with the government over restraint on pay and increased lending for small businesses, the Sunday Times reports.Bank of England policy-makers must "hold their nerve" and leave interest rates at the current record low despite soaring inflation and mounting questions about their credibility, according to a leading forecaster. Raising rates before the economy is back on a firm footing risks "endangering both the recovery and the [deficit reduction programme]", the Ernst & Young ITEM Club will say in a report published tomorrow, the Sunday Telegraph reports.National Grid is poised for fresh turmoil this week as an American regulator rejects the utility group's demands for price increases. Investors have been putting pressure on Steve Holliday, the chief executive, to address the performance from the American arm since he sprung a surprise £3.2bn rights issue on them last May. Holliday said the cash call was needed to cover the soaring cost of upgrading Britain's ageing power and gas networks. Analysts say the company may need up to £35bn over the next decade to link in the wind farms and nuclear power stations required to meet climate change targets, the Sunday Times reports.The tycoon behind Severstal, Russia's biggest steel maker, will this week push the button on a $5bn (£3.2bn) London float of the gold mining arm of his empire. Nord Gold is the latest natural resources firm looking to cash in on the commodities boom with a big City fundraising. Koks, a Russian iron and coal group, last week announced plans for a London listing. Glencore, the world's biggest commodities trader, is preparing a £30bn float that would be the world's largest since Petrobras, Brazil's state oil company, raised $70bn (£44bn) last September, the Sunday Times reports.The Wall Street bank Goldman Sachs will move centre stage in the ongoing furore over bankers' bonuses this week by setting aside an estimated $15.4bn (£9.7bn) to pay its staff for 2010, amounting to a possible average of $435,000 per employee. Goldman, a perennial lightning rod for fury over banking excess, is likely to suffer a drop in earnings from its figure of $13.4bn a year ago, according to the consensus of analysts' forecasts, and staff payouts will be short of its record $20.2bn distribution before the financial crisis hit in 2007, the Observer reports.The board of Northern Rock, the former building society that became the first British casualty of the financial crisis in autumn 2007, is to begin a series of meetings with bankers in the first step on the road to a government exit, the Sunday Telegraph reports.The world is looking to China as a springboard out of recession - but some hedge funds are betting the country's credit and growth levels cannot be sustained. One manager told the Telegraph, "The Chinese delegation has said all week that there will be double-digit growth for years to come and the Brits have lapped it up. But the data doesn't add up. We think we've experienced credit bubbles over the past few years, but China is the biggest. And yet the global economy is looking to China as not just a crutch but a springboard out of the recession. It's crazy."The bizarrely shaped "Can of Ham" office tower could yet add to the City skyline after one of the world's biggest pension funds agreed to buy it out of administration. Teachers Anuity and Insurance Association - College Retirement Equities Fund, which invests on behalf of 3.5 million teachers and doctors in the US, has bought the site of the proposed block out of the remnants of the failed Targetfollow empire, after agreeing terms with the administrator, Deloitte, last week, the Sunday Independent reports.
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