BP Contemplates Selling Russian Joint Venture

BP (NYSE:BP) announced Friday it may walk away from almost all of its Russian oil and gas interests and sell off roughly one third of its total oil production, by selling its stake in a joint venture TNK-BP.

BP officials said the company received unsolicited interest from unnamed sources to buy its shares of TNK-BP, a Russian oil company owned by both BP and Alfa Access Renova.

If BP sells its stake in TNK-BP, the company will almost be completely removed from Russia, reported The Daily Telegraph, which also said the Russian joint venture contributed $3.7bn in revenue to BP's coffers last year, and represents 29 percent of the British company's total production.

In light of these unsolicited approaches and consistent with its commitment to maximising shareholder value, and its obligations under the Shareholder Agreement, BP has notified Alfa Access Renova of its intention to pursue a potential sale, BP said in a statement, adding that there can be no guarantee that any transaction will take place, said BP.

Gazprom, Rosneft or Alfa Access Renova (AAR) could be among those interested in the purchase of BP's shares.

BP's relationship with its oligarch partners in TNK-BP has not been the smoothest, and it tried partnering with another Russian company, Rosneft, in purchasing the whole of TNK-BP from AAR for $32 billion last year. That move has prompted litigation between BP and AAR that continues today, the Telegraph reported.

AAR remains committed to the successful development of TNK-BP including potentially increasing its shareholding in the business, the Russian consortium said in a statement according to Reuters.

BP's announcement comes following the May 29 resignation of Mikhail Fridman, as TNK-BP's CEO.

In Friday trading in New York, BP's stock rose 52 cents to $36.99.