Thursday, May 25, 2006
Gazprom could buy oligarchs out of TNK-BP, industry sources speculate
Gazprom could buy oligarchs out of TNK-BP, industry sources speculate
mergermarket
Story The latest visit of Sir John Browne, CEO of BP, to Moscow this week has sparked discussions among Moscow investment bankers that BP's partners in TNK-BP, three Russian oligarch groups, might be persuaded to sell their 50% stake in TNK-BP to Gazprom. A BP spokesperson confirmed that Browne is meeting Gazprom but wouldn't confirm whether they would discuss Gazprom buying the Russians out.
The head of Russian strategy at one investment bank said, on condition of anonymity: "Gazprom may have an interest in the Russian half of TNK-BP. That may be why it is refusing to help the company develop the Kovytka gas field, because it wants to develop it itself, as a partner in TNK-BP."
The banker, whose bank is one of the main advisors for both Gazprom and TNK-BP, said: "If I was Browne, I'd be thinking it would make sense for me to have Gazprom as a partner."
Another banker in Moscow said: "One of the main attractions for BP of the merger with TNK was the chance to develop the Kovytka field." The field, in eastern Siberia, contains 2 trillion cubic metres of gas. But TNK-BP cannot develop it without Gazprom helping it develop pipeline infrastructure. Gazprom has so far not helped. "I think BP will end up with Gazprom as an equity partner in TNK-BP", said the banker.
Anthony Brenton, the UK's ambassador to Russia, told this news service that he thinks greater cooperation is likely between Gazprom and TNK-BP. He said: "One of the positive things to come out of President Putin's trip to China in March was that he said he wanted to see Russia supplying more gas to China. The Kovytka field is perfectly placed for that, so maybe we will see progress there." Brenton added that it was "possible" that the field would be developed in a joint venture with Gazprom and TNK-BP.
Al Breach, chief strategist at UBS in Moscow, agreed: "I suspect BP would like Gazprom as an equity partner in TNK-BP, but the terms of the sale would have to be agreed for the Russian shareholders."
TNK-BP is 50% owned by three Russian oligarch groups: the Alfa Group, owned by Mikhail Fridman, Petr Aven and Gurman Han; the Access Industries group, owned by Len Blavatnik; and the Renova Group, owned by Viktor Vekselberg.
The fact the oligarchs bought TNK's assets in controversial privatizations in the 1990s is an added risk for BP, as the company has been liable for large back-tax claims. TNK-BP last week set aside USD 1.3bn for possible future back-tax claims. Alexander Blokhin, oil analyst at Antanta Capital, said: "A closer partnership with Gazprom might help" the company avoid such scrutiny by the tax authorities.
Mikhail Fridman told this news service that he has no intention of selling his stake. The Alfa Group is increasingly investing in the retail sector, which is considered less nationally strategic than the natural resources sector by the Kremlin, and is therefore less politically risky as an investment.
The Russian shareholders are unable to sell their stake before 2007, according to its contract with BP, unless BP waives the agreement. This September, the Russian shareholders will receive their third and final USD 1.25bn tranche of BP shares as payment for BP's 50% of TNK-BP.
Spokespeople at BP and Gazprom declined to comment on the possible TNK-BP sale.
Source mergermarket
Value USD 7,500m (Amount in BP shares Russian oligarchs paid for 50% of TNK)
mergermarket
Story The latest visit of Sir John Browne, CEO of BP, to Moscow this week has sparked discussions among Moscow investment bankers that BP's partners in TNK-BP, three Russian oligarch groups, might be persuaded to sell their 50% stake in TNK-BP to Gazprom. A BP spokesperson confirmed that Browne is meeting Gazprom but wouldn't confirm whether they would discuss Gazprom buying the Russians out.
The head of Russian strategy at one investment bank said, on condition of anonymity: "Gazprom may have an interest in the Russian half of TNK-BP. That may be why it is refusing to help the company develop the Kovytka gas field, because it wants to develop it itself, as a partner in TNK-BP."
The banker, whose bank is one of the main advisors for both Gazprom and TNK-BP, said: "If I was Browne, I'd be thinking it would make sense for me to have Gazprom as a partner."
Another banker in Moscow said: "One of the main attractions for BP of the merger with TNK was the chance to develop the Kovytka field." The field, in eastern Siberia, contains 2 trillion cubic metres of gas. But TNK-BP cannot develop it without Gazprom helping it develop pipeline infrastructure. Gazprom has so far not helped. "I think BP will end up with Gazprom as an equity partner in TNK-BP", said the banker.
Anthony Brenton, the UK's ambassador to Russia, told this news service that he thinks greater cooperation is likely between Gazprom and TNK-BP. He said: "One of the positive things to come out of President Putin's trip to China in March was that he said he wanted to see Russia supplying more gas to China. The Kovytka field is perfectly placed for that, so maybe we will see progress there." Brenton added that it was "possible" that the field would be developed in a joint venture with Gazprom and TNK-BP.
Al Breach, chief strategist at UBS in Moscow, agreed: "I suspect BP would like Gazprom as an equity partner in TNK-BP, but the terms of the sale would have to be agreed for the Russian shareholders."
TNK-BP is 50% owned by three Russian oligarch groups: the Alfa Group, owned by Mikhail Fridman, Petr Aven and Gurman Han; the Access Industries group, owned by Len Blavatnik; and the Renova Group, owned by Viktor Vekselberg.
The fact the oligarchs bought TNK's assets in controversial privatizations in the 1990s is an added risk for BP, as the company has been liable for large back-tax claims. TNK-BP last week set aside USD 1.3bn for possible future back-tax claims. Alexander Blokhin, oil analyst at Antanta Capital, said: "A closer partnership with Gazprom might help" the company avoid such scrutiny by the tax authorities.
Mikhail Fridman told this news service that he has no intention of selling his stake. The Alfa Group is increasingly investing in the retail sector, which is considered less nationally strategic than the natural resources sector by the Kremlin, and is therefore less politically risky as an investment.
The Russian shareholders are unable to sell their stake before 2007, according to its contract with BP, unless BP waives the agreement. This September, the Russian shareholders will receive their third and final USD 1.25bn tranche of BP shares as payment for BP's 50% of TNK-BP.
Spokespeople at BP and Gazprom declined to comment on the possible TNK-BP sale.
Source mergermarket
Value USD 7,500m (Amount in BP shares Russian oligarchs paid for 50% of TNK)
