BP share price: deal with Rosneft close, reports say

on Jun 15, 2015
Updated: Oct 21, 2019

BP Plc (LON:BP) is close to agreeing a £450m million deal with Russian state-owned oil company Rosneft The Financial Times reported today.

It is understood that a deal for a 20 percent stake in the East Siberia Taas-Yuriakh oilfield, one of the largest undeveloped fields in East Siberia, could be announced at the St Petersburg international economic forum this week.
BP has yet to officially confirm details of the deal, but the company’s chief executive Bob Dudley said on the sidelines of the forum that BP would be interested in investing in Russia.
BP’s share price had lost 1.05 percent to 433.00p as of 13:32 BST today, in line with the FTSE 100 blue chip benchmark. The company’s stock is still up some five percent year-to-date.
Rosneft was amongst several dozen Russian companies hit with EU and US sanctions last year, following Moscow’s military intervention in Ukraine. The sanctions restrict those companies’ access to western financing, however they also prohibit oil technology exports to the country, a crucial prerequisite for developing Russia’s vast oil assets in its colder regions.
Unlike US sanctions, which ban US firms from doing business with the Russians outright, EU sanctions allow for a continued degree cooperation with Russian companies, allowing for European based BP, Shell, Eni and StatOil to continue expanding their interests in Russia to some extent.
According to reports from the forum in St Petersburg, the mood has indeed shifted to the positive, as compared with last year, with companies looking past sanctions with the aim of “keeping the plate warm”.
Speaking after the release of BP’s highly-influential Statistical Review of World Energy 2015 last week, Dudley said that his company would be looking into acquisitions in US shale, following the ‘tectonic’ changes in the industry.
“If prices stay in this range, I think you will see assets moving around,” Dudley said. “We would look for things of interest. We’ve got our own special circumstances in the United States that affect our thinking a bit.”
As of 14:54 BST, Monday, 15 June, BP plc share price is 432.55p.

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