BP’s deal with Russian energy firm Rosneft
http://www.bbc.co.uk/news/business-12201853
The Labour leader, Ed Miliband, has voiced concern over BP’s deal with Russian energy firm Rosneft.
A deal was signed on Friday to exploit potentially huge deposits of oil and gas in Russia’s Arctic shelf.
Environmental campaigners have criticised the plans, with Greenpeace saying BP had learned nothing from its failures in last year’s Deepwater Horizon disaster in the Gulf of Mexico.
Mr Miliband said finding alternative forms of energy was the way ahead.
The former climate change secretary was speaking on the BBC’s Andrew Marr Show on Sunday.
“I’d be pretty worried about this,” Mr Miliband said.
“I think that the lesson of the Deepwater Horizon, the Gulf oil spill, should be that… the task for all of us, private companies, government and so on, is not to just keep digging and digging deeper and deeper for oil.
“It is actually to find those alternative forms of energy that can help us move forward in a clean way.”
The “strategic global alliance” between BP and Rosneft will see the firms exchange expertise in exploring Russia’s Arctic region.
The firms will explore in three areas – known as EPNZ 1,2,3 – on the Russian Arctic continental shelf.
The areas covers 125,000 square kilometres in an area of the South Kara Sea.
As part of the deal Rosneft will take 5% of BP’s shares in exchange for approximately 9.5% of Rosneft’s shares.
But environmental group Greenpeace criticised the deal.
“BP has done little to address the issues raised by the Deepwater Horizon disaster, while last year the Greenland government refused to grant drilling concessions to the company because it wasn’t convinced BP has rigorous enough safety protocols,” said Charlie Kronick of Greenpeace.
“Now BP has bought its way into the Arctic by the back door.
“It seems the company learned nothing last year in the Gulf of Mexico.”
The Rosneft tie-up is BP’s first deal since the Deepwater Horizon spill last year, which cost it billions.
UK Energy Secretary Chris Huhne has hailed the agreement as a groundbreaking development.
And, referring to the Deepwater Horizon blast BP boss Bob Dudley has said that the firm “learned many lessons over the past year”.
BP had a terrible 2010 with the Gulf of Mexico spill costing them at least $40bn.
Yukos, formerly Russia’s biggest oil producer, said last night that BP’s investors “should be concerned” about their agreement to issue £5bn in shares to Rosneft.
The deal between BP and the Russian state-owned oil giant signed late on Friday night also contained a pledge that the companies will explore the Arctic for oil together.
This morning, the stock market will give its reaction to the partnership – which sees BP increase its holding in Rosneft from 1pc to 9.5pc – when trading opens in London for the first time since the deal was announced.
However, Yukos has urged BP investors to question the real ownership of 80pc of Rosneft’s assets.
Rosneft swept up most of the oil fields that had belonged to Yukos after Mr Khodorkovsky was convicted of fraud in 2003 and sentenced to nine years in a Siberian jail – in a verdict widely condemned as unsafe by the international community.
The billionaire used to be Russia’s richest man and was given a further 14 years in jail just two weeks ago, sparking further condemnation from countries around the world, including William Hague, the UK’s Foreign Secretary.
Last night, a spokesman for Yukos said the assets that ended up with Rosneft – and are now part-owned by BP – have been taken from 55,000 former shareholders in the company.
“Rosneft has benefited disproportionately from the illegal auctions, bogus bankruptcy fire-sales and expropriation of Yukos Oil Company since 2004,” she said. “These illegal auctions and Yukos’s expropriation are the subject of many high-profile court cases brought by the former Yukos management to protect the interests of over 55,000 shareholders.
“Yukos stated very clearly during the Rosneft initial public offering on the London Stock Exchange that any investor would be investing in stolen assets with no guarantee of title.
“BP shareholders should be concerned that once again the company has invested in a deal with Rosneft on assets over which there is significant question as to security of Rosneft’s ownership, a fact of which we are confident the BP management are fully aware in striking the deal.”
A BP spokesman said: “We have been a shareholder in Rosneft since 2006 and this is just deepening that. We are going into this with our eyes wide open.”
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i guess the minor incident in the gulf of mexico is now forgotten..seems like some creative accounting as well by rosneft to get this field..BP and russia holding hands..russia the enemy?..never!
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