BP moves step closer to Rosneft link-up

BP will hand over Arctic exploration rights, included in the original deal, to existing Russian joint venture TNK-BP to secure an £8bn share swap with Rosneft.

The move comes amid a fierce arbitration process between BP and its partners, a consortium called Alfa Access Renova (AAR), who accused the embattled supermajor of breaching its obligations with TNK-BP.

Rosneft must now approve the handover of the Arctic opportunity, as well as a technical amendment of the share swap terms, for the revised deal to go ahead.

An interim injunction, imposed by arbitrators in Sweden, blocking the deal remains in place until Rosneft gives consent.

The deal – hailed by BP as “historic” and “groundbreaking” when it was unveiled in January – would have paved the way for BP and Rosneft to jointly explore the south Kara Sea in the Russian Arctic.

Under the new terms, BP would still stand to benefit from the Arctic exploration as it owns a 50 per cent stake in TNK-BP.

The region is thought to contain more than 60 billion barrels of oil and would have provided a lucrative revenue stream for deca- des.

For the share swap to proceed, both BP and Rosneft would have to agree that any shares received as a result of the swap would be held for investment purposes only and placed in trust, with voting rights exercised by independent trustees.