BP Taking Steps To Sell TNK-BP Stake

BP BP, Europe's second-largest oil company, is taking steps to sell its 50% stake in its joint venture with Russian oligarch investors, TNK-BP, to OAO Rosneft, Russia's largest oil company. The news comes just weeks after the British oil giant made a $32 billion bid for the half of TNK-BP it doesn't already own. That offer was part of an effort to expedite BP's $16 billion share swap with Rosneft, a deal that is viewed by industry observers, analysts and traders as all but dead. Senior-level BP executives notified TNK-BP on Monday that the company will be sending them a letter declaring its intent to sell its stake in Russia's third-largest oil company, the Wall Street Journal reported, citing sources close to the matter. Again, BP may be rolling the dice in Russia because TNK-BP is reportedly less than enthusiastic about being half-owned by rival Rosneft. During the talks regarding its now fallen Arctic exploration alliance with BP, Rosneft was adamant in its refusal to allow TNK-BP to become part of the partnership. While the price tag BP will command assuming it is successful in selling its TNK-BP stake will likely be north of $30 billion, enough to help the company easily surpass its asset divestment target of $30 billion set after the Gulf of Mexico oil spill last year, the sale could be a significant blow to BP's near-term oil output. Asset sales already led to a decline in BP's first-quarter production and TNK-BP, one of BP's crown jewel assets, accounts for 25% of the British company's production. The venture also accounts for 20% of BP's reserves and 10% of its profits.