BP to buy $1bn Rosneft stake

18-07-2006

BP to buy $1bn Rosneft stake
BP is set to announce the purchase of a $1 billion stake in the Russian oil company Rosneft.

Following persistent rumours linking BP with Rosneft's imminent IPO the UK-listed oil firm is now preparing to make a significant investment, press reports suggest.

BP is hoping the deal will strengthen its ties with the Russian government, which is keen for the IPO to be a success.

Rosneft is planning to float 14 per cent of its business in London and Moscow with the aim of raising $11 billion.

Reports yesterday suggested that strong interest in the deal meant that the order book would close today, a day earlier than planned.

BP has a number of oil and gas interests in Russia and will expect the deal to cement its relationship with the Kremlin.

State-owned Rosneft has been embroiled in controversy after it was implicated in the dispute between Russian president Vladimir Putin and Mikhail Khodorkovsky, the boss of oil giant Yukos.

Supporters of Mr Khodorkovsky, who has been jailed for tax fraud, believe BP had little choice but to get involved in the Kremlin's flagship flotation.

"BP has had a gun held to its head and I am not going to blame the victim," his lawyer Robert Amsterdam told this morning's Independent, adding: "Even the biggest companies are now subject to extortion."

BP is yet to comment officially on the deal.

Over the weekend, press reports linked Chelsea owner Roman Abramovich with a possible Rosneft bid.

China's National Petroleum, Malaysia's Petronas and India's ONGC are also thought to be interested in buying a stake in Russia's third largest oil firm.

Related categories: Management / Business, Banking / Finance, Manufacturing / Industry, International / Overseas.


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