Russian Roulette – the BP and Rosneft deal

5 Nov 2012 james

On 22nd October BP plc announced it had agreed heads of terms to sell its 50% stake in TNK-BP to Rosneft. BP’s official announcement of the proposed deal refers to Rosneft’s 2011 oil reserve replacement ratio of 127% and dividend of 25% of IFRS net income. However, there are a number of areas of concern for BP shareholders including the potential impacts of a proposed Russian government divestment in 2015, a threat to Rosneft’s continued dominance in the Russian Arctic, allegations of a lack of corporate transparency, and Rosneft’s questionable environmental record.

This briefing provides a summary of the proposed deal and background on Rosneft. It highlights issues shareholders may wish to discuss with BP and proposes some questions for investor engagement.

Download the report (pdf).

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