BP has announced plans to sell its 50% stake in TNK-BP, a Russian joint venture, after being approached by potential buyers. BP said it had “received unsolicited indications of interest regarding the potential acquisition of its shareholding in TNK-BP” and that it had an obligation to shareholders to pursue a potential sale, so it had notified Alfa Access Renova, its Russian partners, of its intention to do so. The potential buyers have not been identified.
TNK-BP has been a lucrative investment for BP and the company offered to buy out the Russian oligarchs who own the other half of the venture last year. TNK-BP is one of the top oil companies in Russia and makes up about 30% of BP’s oil and natural gas production and 20% of its reserves. The company has been responsible for around 10% of BP’s profit annually over the last decade.
According to a company statement, BP bought into the joint venture in August 2003 for about $8 billion and has earned $19 billion in dividends since then. David Nicholas, a BP spokesman, said, “It’s been a successful joint venture for both partners over the last 10 years. There’s been some disruptions, and we’ve worked hard with our partners to come up with a long-term solution that would bring long-term clarity to the venture, which has not happened.”
BP said the process of evaluating a potential sale could take several months and that there was no guarantee that a transaction would take place. A sale of the stake would generate proceeds the company could invest in operations with higher profit margins. The stake is estimated to fetch up to $30 billion.
Alfa Access Renova issued a statement suggesting that it might be interested in buying some or all of BP’s stake. The Russian partners have the right of first refusal for any buyout offers. The statement said, “It has become apparent that the parity ownership structure has become inoperable given fundamental differences over strategy and governance between A.A.R. and BP. A.A.R. remains committed to the successful development of TNK-BP including potentially increasing its shareholding in the business.”