May 17, 2011
BP Plc's (NYSE:BP) disputed share swap and Arctic oil exploration agreement with Russian state-owned company Rosneft has collapsed, opening the door for Rosneft to find another company to fill the void.
The deal came apart because BP failed to first consult with its Russian partners in a separate joint venture, TNK-BP. The joint venture was founded in 2003 as a 50/50 split with the Alpha-Access-Renova Group and is Russia's third largest producer of oil.
The deadline to resolve the dispute passed Monday night at midnight, but BP said Tuesday it would continue discussions with both Rosneft and its TNK-BP partners about collaborating in the future.
Under the proposed deal, BP would have gained access to the Kara Sea, a region of the Arctic Ocean that is considered a new frontier in oil exploration. The deal was new CEO Robert W. Dudley's first big transaction and was party of his strategy to focus on BP's exploration capabilities in quickly growing countries like India and Russia.
Shares of BP are trading up 0.35% at $42.61.
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