Royal Dutch Shell Plc  .com Rotating Header Image

Shell muscles in on BP’s Russian deal

By Tom McGhie and Will Stewart
26 March 2011, 7:03pm

BP is under intense pressure to settle the dispute with the four oligarch shareholders in its Russian joint venture that threatens the company’s future, after it emerged that rival Shell was holding talks with Kremlin-owned oil giant Rosneft about Arctic exploration.

Rosneft’s powerful chairman and Russia’s Deputy Prime Minister, Igor Sechin, said the company preferred to do a deal with BP, but that whatever happened its policy of exploiting Arctic oil and gas reserves would go ahead.

A Rosneft source said: ‘If we do not get a deal with BP, the state holding will find a new partner. Within the past three months Rosneft has received offers to work together from several leading energy companies, including Shell.’

BP’s big rival said it had had a relationship with Rosneft since 2007 and was open to further opportunities. Shell has made no secret of the fact that it sees the Russian Arctic as one of the world’s major untapped gas and oil exploration areas.

Company sources said they were interested in Arctic co-operation, but not the closer financial ties BP is seeking. BP is planning a share swap with Rosneft.

News of Shell’s intervention comes as BP is reeling from an arbitration court ruling by a Swedish panel in London that upheld the objection by the oligarchs in TNK-BP to the £6.3bn tie-up with Rosneft.

The shareholders, collectively known as Alfa-Access-Renova (AAR), say BP’s proposed Rosneft deal violates an agreement between BP and TNK-BP. This, they claim, stipulates that BP should pursue all development opportunities in Russia through the joint venture rather than going it alone.

BP’s new chief executive, American Bob Dudley, is also under pressure to reach a deal with the fourbnaires – Mikhail Fridman, Len Blavatnik, Viktor Vekselberg and German Khan.

Most analysts believe that Dudley, who was run out of Moscow by the oligarchs in a TNK-BP feud in 2008, misjudged the strength of opposition when he tried to reach a deal with Rosneft, bypassing TNK-BP.

Dudley will be hoping the Kremlin will put pressure on the oligarchs, but it is almost certain he will have to give them some form of compensation.

SOURCE ARTICLE and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

0 Comments on “Shell muscles in on BP’s Russian deal”

Leave a Comment

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.

%d bloggers like this: