LONDON – BP PLC’s partners in Russian joint venture TNK-BP rejected a proposal by the British oil company on Saturday regarding its disputed tie-up with OAO Rosneft, Russia’s top crude producer.
BP said the consortium of Russian billionaire shareholders did not accept an offer to involve them in talks about the Rosneft deal at a TNK-BP board meeting in Paris.
“A proposal by BP’s nominated directors, which would have allowed TNK-BP to hold initial discussions with Rosneft about pursuing the Arctic opportunity, was rejected by Alfa, Access and Renova (AAR),” BP said in a statement.
The AAR consortium, which has four representatives on the TNK-BP board – alongside four BP-nominated directors and three independent directors – has argued that BP’s proposed $8 billion share swap deal with Rosneft violates the TNK-BP shareholders’ agreement and would erode the joint venture’s competitive advantage.
AAR last month won a High Court injunction in London that has put the deal on ice until the dispute is resolved. The two sides underwent court-ordered arbitration this week and a ruling is expected by the end of the month.
The increasingly acrimonious dispute is giving BP a major headache as it tries to regroup and move on from the disastrous Gulf of Mexico oil spill. The Rosneft deal to explore the Arctic seabed would allow BP to hedge its production options as it faces new restrictions in the United States.
BP said Saturday that it “remains committed to finding a reasonable businesslike resolution to the matters raised by AAR… This will be through arbitration and direct talks with all parties involved.”
The London-based company added that it “continues to act constructively and reasonably.”
Rosneft was more blunt in a warning statement issued ahead of the board meeting, saying it never considered TNK-BP as a possible participant in its alliance with BP “due to its lack of the relevant competence and TNK-BP never made any proposals to Rosneft expressing its interest in working on the shelf.”
“Any activities aimed at disrupting the deal that cause damage to Rosneft will be closely examined,” it added. “Based on such examination, Rosneft will undertake all measures to defend the rights of its shareholders, with all the resulting consequences.”
Saturday’s extraordinary board meeting in Paris, called by AAR, was the third board meeting to be called on the dispute after the first two failed to find a resolution.