BP reaping billion$ from Russian oil deal

Tanker Border Tartan leaves Aberdeen. Photo taken from the North quay, with the South Breakwater Light seen beyond the ship. Border Tartan is a coastal tanker owned by Darwin Shipping and registered in Douglas, Isle of Man. It is in use by BP. When photographed it was empty. We were told that it is used to collect oil from a seabed tank and bring it ashore. Used under the Creative Commons Attribution-Share Alike 2.0 Generic license.

The British conglomerate will sell off its 50 percent stake in TNK-BP to Russia's Rosneft this coming October, for $17.1 billion in cash and shares. The transaction is to occur over a period of 12 to 18 months. The company’s original investment dates back to 2003.

In the ensuing decade, the oil giant has realized $19.1 billion in profits from an initial cash investiture of $8 billion, according to BBC News.

"We expect our stake in Rosneft will generate long-term value for BP and its shareholders, but this buyback program should also allow our shareholders to see benefits in the near-term from the value we have realized by reshaping our Russian business," stated BP chairman Carl-Henric Svanberg.

Though highly lucrative, BP’s venture in Russia with TNK-BP has not been a rose garden, fraught with the contention and opposition oil companies frequently encounter on multiple levels. Two years ago a joint drilling venture in the Arctic by BP and Rosneft was successfully blocked by the AAR consortium via legal action.

Meanwhile, Russian authorities harassed BP employees, notably Bob Dudley, head of TNK-BP at the time. Wiretaps were found in his office, followed by police raids, burdensome demands for back taxes, legal action and even problems with his visa.

Dudley fled the country in 2008 and now is the head of BP as a whole.

It makes for a very peculiar career path, does it not?

By switching its venture to Rosneft, BP will remain in Russia, continuing to explore and exploit the country's vast energy resources, especially those in the Arctic.

Rosneft gains BP's considerable expertise in finding and extracting oil in difficult and potentially hazardous conditions.

Image: Tanker Border Tartan leaves Aberdeen. Photo taken from the North quay, with the South Breakwater Light seen beyond the ship. Border Tartan is a coastal tanker owned by Darwin Shipping and registered in Douglas, Isle of Man. It is in use by BP. When photographed it was empty. We were told that it is used to collect oil from a seabed tank and bring it ashore. Used under the Creative Commons Attribution-Share Alike 2.0 Generic license.