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BP's Rosneft Alliance Appears Dead

Russia's OAO Rosneft no longer is considering BP plc as a partner for its planned Arctic development, the company's CEO said Friday.

In January the two producers announced a "groundbreaking strategic alliance" that included Arctic exploration as well as a stock swap, which at the time was worth about $7.8 billion (see Daily GPI, Jan. 18). The mega-deal also was considered a way for BP to regain some value after last year's Gulf of Mexico oil disaster. The deal began to collapse after BP's current Russian partner TNK-BP objected and won a legal challenge blocking the alliance (see Daily GPI, May 24).

Rosneft CEO Eduard Khudainatov told reporters on Friday that the company had not received any new proposals from BP to salvage the transaction. His comments followed those by BP Chairman Carl-Henric Svanberg on Wednesday, who said the company remained Rosneft's "favored partner...I'm sure some kind of deal could still materialize in one form or another."

However, BP CEO Bob Dudley, who had helped craft the proposed alliance, said, "In the meantime, we're moving on." He said BP needed to return to business with TNK-BP and there was no intention to sell its stake in that joint venture. The company has other compelling growth prospects, he told reporters.

BP now is readying the launch of 30 global projects by the end of 2016 and is returning to work in the Gulf of Mexico, said Dudley. "Russia isn't the biggest thing we're focused on."

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