Medvedev suggests BP-Rosneft deal was doomed

AP News
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Posted: May 18, 2011 11:09 AM
Medvedev suggests BP-Rosneft deal was doomed

Russian President Dmitry Medvedev said Wednesday that parties in the BP-Rosneft deal should have predicted the issues that made it collapse.

The deadline to swap shares worth $16 billion with state-owned Rosneft and jointly develop the Russian sector of the Arctic passed Tuesday, marking an embarrassing setback for BP's new CEO Bob Dudley who, was hoping it would help the company to recover from the Gulf of Mexico spill.

Medvedev told a news conference that the Russian government, the state-owned Rosneft oil major and BP shouldn't have signed any agreement that bypasses TNK-BP, the British company's Russian venture.

TNK-BP's four Russian billionaire shareholders blocked the deal in court, arguing that it violated terms of their shareholder agreement with BP.

"I think those who were preparing the deal should have paid closer attention to the details of the shareholders' agreement, and to the legal issues that normally arise during the preparation of such major deals," Medvedev said.

Meanwhile, Rosneft said in a statement Wednesday that it would still consider cooperation with BP, even though the deal collapsed. The company was not available for further comment.

Deputy Prime Minister Igor Sechin, who oversaw the preparation of the deal, told Russian news agencies during his trip to Western Siberia that he takes no blame for the failure.

He repeated a warning made earlier this year that in the event the deal collapsed, Rosneft lawyers would study the feasibility of suing BP, although he conceded the collapse caused no harm to Rosneft or Russia.

"We're talking about protecting the interests of the shareholders here. We have literally removed the exploration of the Arctic from our plans for the next six months. That's a lot of time," Sechin said in comments carried by Interfax.

He also stressed that Rosneft is still open to cooperation with BP, although Rosneft is free to negotiate with other oil majors, since it will soon come under pressure to meet deadlines set by the government on exploring the Arctic fields that it holds licenses for.