BP-Rosneft deal off, but talks continue

BP has confirmed reports that Russian state-controlled oil company Rosneft has opted not to extend the deadline for a share swap transaction but the oil giant said it remains committed to Russia.The swap was part of an agreement that would have given BP an interest in offshore Arctic exploration assets, but the UK company's decision to get into bed with Rosneft without consulting its Russian partners in the TNK-BP joint venture put TNK's nose out of joint, resulting in court action by TNK to block the deal. BP and Alfa-Access-Renova (AAR), the consortium behind the court action, said they would intensify their efforts to ensure TNK-BP's continued success following the lapse of the BP-Rosneft share swap transaction.Talks are continuing on a solution that would satisfy all parties and possibly get the Rosneft show back on the road. BP and AAR have each acknowledged the active engagement and support provided by Rosneft throughout the recent discussions. Both BP and AAR see significant advantages in continuing to deepen this dialogue and cooperation with Rosneft, the statement said."BP remains committed to Russia, to working constructively with AAR in TNK-BP and to our existing good relationship with Rosneft. All parties have worked hard to reach an acceptable resolution, as we believe it could offer significant benefits to BP shareholders, to Rosneft, AAR and Russia," said BP group chief executive bob Dudley."We look forward to continuing our work with Rosneft in our Sakhalin joint venture, running our new joint German refining business, and considering other future projects," Dudley added.Mikhail Fridman, chairman of Alfa Group, was also making placatory noises. "AAR also sees significant benefit to developing cooperation with Rosneft within the framework of the TNK-BP shareholder agreement, and we plan to continue discussions about potential collaboration among BP, Rosneft and AAR," Fridman said. ---jh