Rosneft BP deal collapse reflects unknown issues
RT: Are you surprised the deal collapsed?
CT: “I am not surprised because there were too many issues at stake and I am glad that actually it collapsed, because it showed that BP is having financial maturity and it is not going to be carried away just to get the deal. There were too many issues that were still uncertain, and that AAR was not willing to give in to. So I don’t think that even though it is touted as a collapse of the deal, I don’t think it is the end of the deal. I think that it’s the end of the deal under the conditions as how it existed. But going forward I think they can continue to negotiate. Now each party is more aware of the needs and wants of the other party and they can continue to deliberate until they arrive at some understanding. That is assuming that AAR is really interested in negotiating, because it doesn’t look like it from the outside.”
RT: Rosneft is now reported to be looking for a new partner. Who are candidates?
CT: “Rosneft has several partners and there are not that many companies that can operate offshore in the Arctic. One of them is Exxon, but the management would not be able, and would not put up with all the song and dance that it entails. Another one is Total. You have potentially, those are the two. Royal Dutch Shell, which has already cooperated in other areas. But with BP, it has a long standing relationship, and it would be a pity, to let it go, since BP is probably the company that is more willing to give more than its fair share, in order to further both the cause of Rosneft and BP. They have been working together since 1998, they already have an exploration study going on about the offshore Arctic. I think they can continue. There is no reason why this stops. I mean what has stopped is the fact that it says, OK this is how we are going to operate, but what has not stopped is the cooperation, studying and evaluating how to explore resources in the Arctic. That can continue, and this is a ten-fifteen year horizon. You are not going to start exploring or, shall we say, drilling, not for at least 3 more years. So negotiations can continue, Rosneft and BP can continue. I don’t think that what spooked AAR was necessarily the Arctic, because BP and Rosneft have already been working offshore in the Russian continental shelf, and they were well aware of it. They have in the past rejected any advances on cooperation with working in the Arctic. I think that what spooked them was the fact that BP and Rosneft were exchanging shares, because they might feel threatened, they might feel that Rosneft might have indirect control of TNK-BP, by having a seat in the board. So I think there are other issues, and we don’t know behind the scenes what problems AAR has with its other groups. So there is a lot going on in the background which we are not privy, but the Arctic exploration itself, I don’t think that’s the issue.”
RT: Will BP and AAR be able to work together in TNK-BP now?
CT: “The operation continues. The problem was never management of TNK-BP, they have always said that. The issue was with the oligarchs and the partners at AAR. Operations at TNK-BP have continued and will continue as they are. That is not a problem.”