BP executive expects Rosneft stake to yield partnerships in Russia
BY ANGEL GONZALEZ
HOUSTON – BP expects its stake in Rosneft to flourish into direct partnerships to tap Russia's oil wealth, the Head of the company's exploration and development division said.
At a meeting with reporters on the sidelines of the Offshore Technology Conference (OTC), BP's upstream CEO Lamar McKay, said BP which owns about one-fifth of Rosneft's shares, will be "trying to help Rosneft improve as a company" recreating some of the impact it had with TNK-BP. In March BP closed a deal to sell its shares in TNK-BP to Rosneft for a 19.75% stake in the Russian oil giant and more than $12 billion in cash.
The deal will result in cost synergies and immediate exploration and development benefits because many of TNK-BP's assets are contiguous to Rosneft's fields, Mr. McKay said. "We also, over time will have the opportunity. We believe we will have the opportunity to do things, BP with Rosneft either onshore of offshore” the executive said.
Mr. McKay's comments came as BP seeks to emerge from the shadow of the Deepwater Horizon disaster as a smaller company more focused on high impact areas. Russia, where Mr. McKay helped build the sometimes troublesome TNK-BP partnership, is one of these focusing points. After a long period of having a wary stance towards foreign investors, Russia recently has allowed Rosneft to strike joint venture deals with Exxon Mobil and others.
Mr. McKay said the Russians have done a good job in exploiting their resources, and once permits are awarded, things move speedily. But there is still a lot of potential to apply new technology to increase recovery, and BP's partnership with Rosneft is "a bigger platform" from which to operate, in comparison with TNK-BP. "This is the start of a new relationship" Mr. McKay said.
Dow Jones Newswires