Uncertainty on Rosneft and BP share swap continues...........Will this impact BP's joint projects with Rosneft???

Uncertainty about a strategic alliance between Rosneft and BP, blocked by the BP's partners in the TNK-BP joint venture, will not affect BP's investment projects in Russia.

Exisitng joint developments

BP's joint projects with Rosneft on Sakhalin are still an investment priority for BP in Russia.

BP and Rosneft are jointly developing deposits off Russia's Pacific Island of Sakhalin. The companies are implementing the Sakhalin-V project, which initially envisaged the exploration and development of the Vostochno-Shmidtovsky deposit with estimated recoverable reserves of 411 mln tons (3 bln barrels) and 255 bln cubic meters of gas, and the Kaigansky-Vasyukansky deposit whose recoverable oil reserves are estimated at 1.2 billion tons (8.6 bln barrels).

In 2009 the partners abandoned exploratory drilling at the Vostochno-Shmidtovsky field and returned the license to the government.

Uncertainty due to suspension of the deal by British Court

BP and Rosneft agreed in mid-January to form a strategic alliance to explore the Arctic seabed in a share swap deal but BP's partners in TNK-BP objected to the move, saying all of BP's new business opportunities in Russia and Ukraine must be pursued through the Russian-British joint oil venture. The JV's Russian billionaire shareholders won a preliminary order in a British court to suspend the deal.

Uncertainty to continue

Willfully ignoring the provisions of the shareholder agreement was a serious misjudgment by BP that has severely damaged the relationship between the TNK-BP shareholders; it has also harmed BP’s reputation in Russia.

AAR Group(BP’s partners) has now put itself in a very strong position to have either a more active role for TNK-BP in the deal or to get compensation.
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