.BP-Rosneft deal: Russia takes 5pc stake in BP, raises trust fears
Bob Dudley said there was “mutual confidence and trust” between BP and Rosneft, as they agreed to buy £5bn of each other’s shares and explore the Arctic together.
The agreement, backed by Prime Minister David Cameron and Russian Prime Minister Vladimir Putin, has already drawn anger from American politicians. It comes at a sensitive time for BP as the energy major tries to repair its relationship with the US following the Gulf of Mexico oil spill last year.
US congressman Edward Markey, a prominent Democrat who led investigations into the giant leak, questioned the deal on grounds of “national and economic security”. On Friday night, he claimed that “BP once stood for British Petroleum. With this deal, it now stands for Bolshoi Petroleum.”
Under the terms of the agreement, BP will issue £5bn of shares to Rosneft, which is 75pc owned by the Russian government, as it seeks access to the country’s valuable reserves. It will also buy a £5bn stake in Rosneft that will take its 1pc interest to 9.5pc.
BP shareholders will see their holdings diluted and their exposure to Russia’s unpredictable business climate increase. However, the share swap ties the fortunes of Rosneft to BP’s financial success, making what insiders claim is a “more stable relationship”.
Telegraph
The agreement, backed by Prime Minister David Cameron and Russian Prime Minister Vladimir Putin, has already drawn anger from American politicians. It comes at a sensitive time for BP as the energy major tries to repair its relationship with the US following the Gulf of Mexico oil spill last year.
US congressman Edward Markey, a prominent Democrat who led investigations into the giant leak, questioned the deal on grounds of “national and economic security”. On Friday night, he claimed that “BP once stood for British Petroleum. With this deal, it now stands for Bolshoi Petroleum.”
Under the terms of the agreement, BP will issue £5bn of shares to Rosneft, which is 75pc owned by the Russian government, as it seeks access to the country’s valuable reserves. It will also buy a £5bn stake in Rosneft that will take its 1pc interest to 9.5pc.
BP shareholders will see their holdings diluted and their exposure to Russia’s unpredictable business climate increase. However, the share swap ties the fortunes of Rosneft to BP’s financial success, making what insiders claim is a “more stable relationship”.
Telegraph
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