* Oligarch co-owners have already expressed interest
* BP's stake in TNK-BP worth $25-$30 bln - analysts
* No deal possible for three months
* Final deal structure unclear, but state seen in control
* State banks would bankroll transaction - bankers
By Douglas Busvine and Megan Davies
MOSCOW, July 24 State oil company Rosneft
waded into the dispute between BP and its Russian
partners on Tuesday, saying it is in talks to buy half of the
troubled venture in a reminder the Kremlin is likely to fire the
final shot in the battle.
British oil major BP has said it is seeking to exit
its troubled but lucrative investment in Russia's third-largest
oil company, TNK-BP. It formed the 50:50 joint venture
with AAR, the consortium representing the tycoons, nearly a
decade ago to tap into the country's vast energy reserves. The
group is now estimated to be worth as much as $60 billion.
Rosneft's gambit signals the resolve of new Chief Executive
Igor Sechin, the energy "tsar" in Russia's previous government,
to build the country's largest oil company into a national
champion of global scale.
"Rosneft has an established expertise and track record in
managing large assets and considers the potential acquisition of
BP's participation in TNK-BP to be an attractive commercial
proposition," Sechin said in a statement.
"The potential acquisition would complement its existing
portfolio and create value for all stakeholders."
AAR has already expressed its interest in buying half of
BP's stake in TNK-BP, but would also consider selling for cash
and BP stock to end a shareholder relationship that has broken
BP said that while conducting discussions with Rosneft and
any other interested parties, it will also negotiate in good
faith with AAR.
Rosneft said it had agreed to enter negotiations with BP on
buying its 50 percent stake in the joint venture and had signed
a non-disclosure agreement.
AAR, led by banking-to-retail tycoon Mikhail Fridman,
declined to comment. Last week AAR expressed its interest in
buying 25 percent of BP's stake in TNK-BP, and has said it would
be willing to pay $10 billion.
Under the TNK-BP shareholders' agreement BP cannot conclude
a deal with anyone other than AAR for a period of 90 days.
MARRYING THE JUDGE
BP's stake in TNK-BP , acquired for $7 billion in 2003 , is
estimated by analysts to be worth between $25 billion and $30
"If this were to happen (Rosneft buys out BP), it would be
the best-case outcome for BP, but the worst case for AAR and bad
for (TNK-BP) minorities," Chris Weafer, chief strategist at
Troika Dialog, said in comments emailed to Reuters.
BP, having agreed a deal with the state, would gain access
to projects similar to those involving other Western energy
majors, such as ExxonMobil, that have recently struck
ambitious exploration agreements in Russia, Weafer added.
"It would still be in the Russia game, but with a cash
payout and rid of its troublesome partners. A bit like getting a
divorce and then marrying the judge."
Bankers and analysts said that, by selling, BP would realise
a slug of cash that would help it to meet multibillion-dollar
liabilities arising from the Gulf of Mexico disaster of 2010 but
it would cut off much-needed cash flows from Russia.
BP has reaped $19 billion in dividends since buying into
TNK-BP -- more than double its original investment. AAR has
pointed out that TNK-BP contributed more than 90 percent to BP's
dividends of $4.1 billion last year.
BP shares rose 0.4 percent by 1243 GMT, while Rosneft stock
gained by 0.6 percent in Moscow. Shares in TNK-BP's listed unit,
which has a small free float, fell by 0.6 percent.
Russian state-controlled banks would finance Rosneft's
acquisition of BP's stake in TNK-BP, but would probably need the
support of foreign lenders in a major syndicated deal, bankers
It is possible, analysts speculated, that Rosneft would buy
all of TNK-BP in a deal that would create an 'oil Gazprom'
with the sort of geopolitical clout that Russia's
state-controlled gas export monopoly can project through its
Such a deal - involving a multi-billion-dollar payday for a
group of unpopular business oligarchs - would present the
Kremlin with a substantial public-relations challenge, however.
One banker close to AAR, meanwhile, said that its proposal
to buy half of BP's stake was also bankable. Deal financing
would be paid off within a few years out of TNK-BP's dividend
flows, and the firm itself could be leveraged to finance a deal.
BP announced on June 1 that it would put its TNK-BP stake up
for sale, giving AAR 45 days under the shareholder pact to
express its interest.
Fridman quit as TNK-BP's chief executive in late May, days
after Sechin was named Rosneft chairman in a move that signalled
a major energy power shift in Russia after Vladimir Putin's
re-election for a third presidential term.
Sechin had been thwarted a year earlier by AAR in his
attempt to forge a strategic offshore exploration deal and share
swap between Rosneft and BP. AAR, which had blocked the alliance
in the courts, turned down a $32 billion last-ditch joint bid by
Rosneft and BP to buy it out in May 2011.
The prospect of partnering now with a state company may not
be palatable for Fridman and his co-investors -- German Khan,
Viktor Vekselberg and Len Blavatnik. One scenario would be that
it is they who end up exiting the business, some analysts say.
"My opinion is that the end deal is going to be AAR exiting
rather than BP, because I really don't see a way for Sechin to
work with AAR," said one analyst from a Western bank in Moscow,
speaking on condition of anonymity.
"I think the end deal is BP and Rosneft together buying out
the AAR stake, 25 percent each. That could easily be financed by
Rosneft and BP."