BP's Rosneft deal in doubt after Sechin departure

Energy Reuters

By Tom Bergin

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LONDON (Reuters) - BP's planned $18 billion share swap and Arctic exploration agreement with Russia's Rosneft was cast further into doubt on Tuesday after its chief backer Igor Sechin stood down as Rosneft chairman and sources said BP faced a new legal challenge.

Deputy Prime Minister Sechin resigned his position after President Dmitry Medvedev ordered the removal of ministers from the boards of state companies as part of his campaign to separate politics and business.

BP's tie-up with state-controlled Rosneft is already blocked by a court injunction secured by BP's Russian partners in its TNK-BP venture, and analysts said Sechin's departure could reduce any political pressure on the oligarchs to drop their opposition.

"Now the Rosneft chairman has quit, it makes it even less likely the deal will go through," said Dougie Youngson, an oil analyst at Arbuthnot.

TNK-BP is also mulling a legal claim against BP for damages of up to $10 billion, sources close to the company said, for reneging on an undertaking to use TNK-BP as the main vehicle for investment in Russia.

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TNK-BP's CEO, Mikhail Fridman is also the leading figure in AAR, the consortium of four Russia-connected billionaires which owns 50 percent of TNK-BP.

However, some analysts said Sechin's departure might not change things, as he could install someone at Rosneft who would represent his views.

The problems come as the agreement on the planned $16 billion share swap is just two days from expiring on April 14.

Sources close to the process said that in addition to trying to reach an agreement with AAR which would allow the lifting of the injunction, BP is in talks with Rosneft about deferring the deadline.

(Editing by David Cowell)

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