THE long-running saga of BP's troubled Russian joint venture moved closer to a conclusion last night as it held talks on a deal with state-owned oil giant Rosneft. Igor Sechin, chief executive of Rosneft, flew in to London for discussions on buying out BP's 50 per cent stake in TNK-BP in a deal that could be worth as much as £17.5billion for the FTSE 100 group.

1. ROSNEFT IS
POISED TO
BUY BP'S
8
HOLDINGS
IN RUSSIA
by: Gerard Lincoln
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2. THE long-running saga of BP's
troubled Russian joint venture moved
closer to a conclusion last night as it
held talks on a deal with state-owned
oil giant Rosneft.
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12. BP HOLDINGS (HEADLINES)
Igor Sechin, chief executive of Rosneft, flew in
to London for discussions on buying out
BP's 50 per cent stake in TNK-BP in a deal
that could be worth as much as £17.5billion
for the FTSE 100 group.
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13. BP HOLDINGS (HEADLINES)
In what insiders described as "a fast-moving
situation" and "a game of brinkmanship"
Rosneft also looked poised to buy the remaining
stake held by BP's partner, the AAR consortium
controlled by a group of Russian billionaires.
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14. BP HOLDINGS (HEADLINES)
After years of friction between the two sides,
both BP and AAR this year signalled they
could sell out of the partnership or seek full
control.
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15. BP HOLDINGS (HEADLINES)
In a dramatic move last night AAR pulled out
of the bidding to buy BP's stake just hours
before today's deadline.
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16. BP HOLDINGS (HEADLINES)
That paves the way for Rosneft to buy out
both BP and AAR to gain control of the
highly profitable TNK-BP business and
create the world's largest oil company.
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17. BP HOLDINGS (HEADLINES)
• BP has made it clear that it retains
ambitions to remain in Russia and to
expand in the Arctic
•
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18. BP HOLDINGS (HEADLINES)
As part of the deal BP is expected to take a 10
per cent stake in the enlarged Russian
business, giving it access to one of the
world's most important oil-producing
countries.
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19. BP HOLDINGS (HEADLINES)
AAR sources said the tycoons had decided not
to bid because they had been unable to raise
sufficient finance in time and BP had
signalled it was not interested in their offer.
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20. BP HOLDINGS (HEADLINES)
Another major problem for AAR is that
Rosneft had already secured backing from a
number of key banks who were unable to
work with a rival bidder.
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21. BP HOLDINGS (HEADLINES)
An alliance between the oligarchs and the
Kremlin-backed company has always been
seen as unlikely and AAR made it clear that
it would seek to sell its holding if Rosneft
came on board.
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22. BP HOLDINGS (HEADLINES)
Although TNK-BP has been very lucrative,
generating £23billion in dividends after an
initial investment of £5billion each in 2003,
the two partners have always had a stormy
relationship.
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23. BP HOLDINGS (HEADLINES)
In 2008 Bob Dudley, the then TNK-BP boss
and now BP's chief executive, was forced to
leave Russia as tensions worsened.
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