TNK-BP may be losing its BP
The New York Times is reporting that BP is looking to sell its 50 percent stake in TNK-BP, its joint Russian venture, for upwards of $30 billion. ”Disputes with BP’s Russian billionaire partners in the joint venture and threats of legal action had cast a shadow over the investment,” write Julia Werdigier and Andrew Kramer.
TNK-BP chairman Mikhail Fridman resigned earlier in the week, suggesting trouble in the company - a sentiment echoed by a statement issued Friday by Alfa Access Renova, or AAR, which is BP’s Russian partner in TNK-BP:
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.
Analysts were not all that surprised about news of the impending sale, given the difficulties Western companies often have doing business in Russia. Jefferies & Co. analyst Iain Reid told the Times that in Russia, “Corporate governance and trust has collapsed, [TNK-BP] is not paying dividends, and they can’t take broad decisions. It’s probably more trouble than it’s worth at the moment.” Read more here.