The troubled TNK-BP Russian joint venture is close to splitting apart with BP looking to sell its 50% stake in the organisation.
TNK-BP - a now dis-united alliance of UK oil giant BP and four Russian Oligarchs under the umbrella group of Alfa-Access-Renova (AAR) - has become Russia's third largest domestic oil producer but is close to a terminal split as BP looks to sell its share in the operation.
The end of the road for the alliance has seemed inevitable since a major dispute between AAR and BP erupted after BP's proposed alliance with another Russian energy giant, Rosneft, was thwarted by AAR last year. Amidst the fallout were revelations relating to the shareholder agreement between the supposed allies, the details of which have remained confidential. However, Russia's competition watchdog, the Federal Anti-Monopoly Service, is demanding that any agreements of this type are now made public.
The dispute and past history does not seem to have deterred Rosneft, which recently hired an ex-TNK-BP executive to run its marketing and refining businesses and has made no secret of its desire to take enter the TNK fold. Gazprom, to whom BP had also made sale overtures in 2008, is also in the frame for purchasing the BP stake. BP paid around $8bn for its share of the business in 2003 and it has delivered a very healthy $19bn return in dividends to the British company and the same for AAR.
While it may be keen to divorce itself from AAR, BP's policy of targeting Russia as a key market remains high on its list of priorities, although the Russian government may be raising the bar on overseas companies maintaining a presence in the energy industry. However, some analysts are urging BP to remain loyal to its goal, even if it is not through TNK-BP.