Rosneft Defends BP Venture, Tells TNK-BP to Back Off

MOSCOW (Dow Jones Newswires), March 11, 2011

Russian state-controlled oil producer Rosneft said it is committed to the deal it struck with BP on an Arctic development and isn't in talks with TNK-BP Ltd. about replacing the U.K. oil major as a partner.

Amid efforts by BP's Russian partners in TNK-BP to muscle their way into a $16 billion share swap and Arctic development deal with Rosneft, Rosneft said it will take "all necessary measures" to protect its tie-up with BP.

"TNK-BP was never considered as a possible participant in the alliance," Rosneft said in a statement. "TNK-BP has never been considered a potential participant in the alliance due to its lack of required competence."

The move comes as TNK-BP's board is scheduled to vote this Saturday on a proposal to replace BP in joint project with Rosneft.

BP's partners in TNK-BP--a group of Soviet-born businessmen known as the Alfa-Access-Renova consortium, or AAR--are opposed to the alliance between BP and Rosneft, arguing that under the TNK-BP shareholder agreement, BP must use its joint venture as vehicle for all projects within Russia.

"Rosneft once again underscores that it did not conduct and is not conducting any negotiations with the AAR group or TNK-BP," Rosneft said.

"Any actions aimed at breaking the deal or inflicting damage on Rosneft will be analyzed and as a result all necessary measures will be taken to protect interests of its shareholders," Rosneft continued.

AAR won an injunction on the deal at a London arbitration tribunal in late January, and a ruling is expected in the beginning of April.

Copyright (c) 2011 Dow Jones & Company, Inc.


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