abce certificate
LIVE

Search >>  

Saturday, 30 August, 2008, 11:20 GMT | more prices >>

BP and Gazprom kick off TNK-BP talks



By Upstream staff 

Photo by Reuters


UK supermajor BP and Russia gas monopoly Gazprom are holding intensive talks on the possibility of Gazprom buying into BP's Russian venture TNK-BP, industry sources were reported as saying today.

BP chief executive Tony Hayward, who flew to Moscow for high-level talks in May and September, met Gazprom's chief executive Alexei Miller again last night, Reuters reported.

"The last meeting took place in Germany at yesterday's Champion's League soccer match between Schalke 04 and Chelsea," said the Gazprom source.

Photographs of the meeting, made available to Reuters, showed the two bosses at the match, smiling and draped in blue-and-white Schalke scarves.

BP has a 50% stake in TNK-BP, Russia's third-biggest oil producer, while a group of Russian and US shareholders own the remaining 50 percent.

BP's spokesman in Moscow, Vladimir Buyanov, confirmed that the two chief executives met yesterday, but declined to comment on the nature of their talks.

"It is natural for the companies' heads to meet from time to time. I would also remind you that BP, Gazprom and TNK-BP signed a deal in June to set up a strategic alliance," he said.

Under that pact Gazprom was to buy TNK-BP's giant Kovykta gas field in eastern Siberia for $700 million to $900 million, while the three companies also plan a broader international venture.

The Kovykta sale is due to close before the end of the year, but an industry source said it may now not happen. "I see a chance of Kovykta never happening at all. It would make no sense if there is a broader deal," he said.

Another industry source said a five-year lock-up agreement that the shareholders signed when BP bought its stake in TNK-BP in 2003 would expire within months.

"Talks have intensified," said the source, who suggested that BP had become keener to link up with a Russian state company since Hayward took charge at BP from John Browne in May.

A source close to TNK-BP's owners said its billionaire shareholders, Viktor Vekselberg, Len Blavatnik, Mikhail Fridman and German Khan, were open to the idea of a sale. At market prices, 50% of TNK-BP would be worth $18.5 billion.

Vekselberg and Fridman have both denied they have plans to sell, but that has not quelled speculation of a deal before voters elect a successor to President Vladimir Putin next March.

State-controlled Gazprom, the world's largest natural gas company, served as the vehicle through which the Kremlin regained control of the vast Sakhalin 2 oil and gas project from Anglo-Dutch supermajor Shell a year ago.

Despite the Sakhalin setback, Shell has come back for more with chief executive Jeroen van der Veer saying today the Anglo-Dutch company would enter a "huge-scale" oil and gas project on the Yamal peninsula.

Gazprom's shares closed up 0.8% in Moscow, leading blue-chip gains and valuing the gas group at over $300 billion. BP shares fell 1.2% in London.

Wednesday, 07 November, 2007, 19:23 GMT  | last updated: Wednesday, 07 November, 2007, 22:24 GMT

New firm: Gazprom boss Alexei Miller and BP supremo Tony Hayward at last night's Chelsea-Schalke 04 Champion's League clash in Germany
 

Related articles


- TNK-BP sees Gazprom deal by end 2008
- TNK-BP hopes for Samotlor boost
- TNK-BP rakes in the profits
- TNK-BP ups power in Siberia
- Russians get time on Kovykta deal
- Gazprom steps into East Siberia
- Pair push back Kovykta deal

Related companies


MarSol
Jim Rohr & Associates
Litre Meter Ltd
TECNA Engineering
Generon
view all
live
hardcopy
to top
print article

e-mail this article to a colleague


to email:  from:
comments: