TNK-BP deal points to new opportunities and growth
A long-awaited compromise. Russian and British shareholders of TNK-BP signed a memorandum of understanding this week, setting aside their differences. Stan Polovets, who represents the Russian side, says the deal is good for the country’s investment climate.
“I think its important from the perspective of how the Russian investment climate is perceived, because the TNK-BP conflict unfortunately became very public. This relationship will now move in a more constructive direction. But obviously people will be watching us very closely and that will create more pressure for the management and for the shareholders.”
Under the agreement, TNK-BP head Robert Dudley will step down by the year's end… replaced by someone neutral. The company will offer up to 20 percent of this shares to the public when market conditions allow.
Analysts say it's not yet clear how TNK-BP will align its interests with the state, but Vitaly Ermakov, director of research at Cambridge Energy Research believes it will now look more closely at links with Gazprom or Rosneft
“The Russian State, prefers to stay above the fray, by and large, and the same thing happened to Gazprom. Gazprom basically decided to wait and see what is going to happen, and having said that, its quite clear that TNK-BP which faces the problem of mature assets and needs, desperately needs to move on to new acreage will try to find some ways of partnering with either Rosneft or Gazprom, basically to have access to new licences in Russia.”
Expanding abroad will also become easier. It will no longer meet the resistance of British Petroleum on its international projects. According to Polovets this will make it easier for TNK-BP to exploit cultural and historical ties.
“There are some countries where it makes more sense for TNK-BP to operate, than it does for BP. Countries for example in Central Asia, or in Central Eastern Europe, in the Baltics, where there are historical cultural ties between Russia and those countries. We’ve tried to persuade our partners from BP that it makes more sense for TNK-BP to proceed there.”
A Russian joint venture of British Petroleum, TNK-BP accounts for almost a quarter of BP's global output and reserves.