BP’s troubled attempt to link up with Russian oil giant Rosneft to drill in Arctic waters appears to be scuppered today.
Yesterday’s deadline for the deal’s agreement has passed without resolution of ongoing problems. Notably, BP’s existing partner in Russia, AAR, had strongly objected to the link up with Rosneft, even going so far as taking BP to court.
Today a statement from BP and AAR stated they would “intensify their efforts” in their TNK-BP joint venture while continuing talks with Rosneft.
A ‘person close to BP’ told the Wall Street Journal that the agreement had only “lapsed” rather than “collapsed” and could “surface again in some form in the future”. But AP spoke to a ‘high-placed source at Rosneft’ who says AAR declined a $32 billion offer to buy out their 50% stake in TNK-BP and that they were no longer interested in further talks.
The failure to push the deal through has hit BP hard, denting its credibility as it attempts to rebuild its image in the wake of the Deepwater Horizon disaster. The link-up was also seen as a major step forward in opening up controversial drilling in Arctic waters (see: A frozen hell).