BP (NYSE:BP) has agreed with Rosneft to extend the deadline for completing the share swap agreement (previously announced on January 14) to May 16, 2011. The agreement between the two companies followed the April 8 decision of the arbitral tribunal to allow them to discuss extension of the deadline. This means that the share swap agreement will now not terminate on April 14, 2011.
The share swap agreement, between BP and Rosneft, together with the related Arctic Opportunity for joint exploration of the three license blocks EPNZ-1, 2, 3 on the Russian Arctic continental shelf, were originally announced on January 14, 2011. Both the share swap agreement and the Arctic Opportunity remain subject to an interim injunction.
BP intends to continue with the arbitration process to obtain a final award on all outstanding issues, including whether or not the interim injunction should continue.
BP remains fully committed to TNK-BP as its primary business vehicle in Russia and fully supports its strategy and investment program, which should ensure its success for decades to come. BP also owns a 1.3% interest in Rosneft and has been exploring offshore Sakhalin for over a decade and engaging in Arctic studies.
The arbitral tribunal was convened to resolve issues raised by Alfa Petroleum Holdings Limited and OGIP Ventures Limited relating to the share swap agreement and Arctic Opportunity arrangements agreed between BP and Rosneft and to clarify BP's obligations under the TNK-BP shareholders' agreement.
Rosneft is Russia's leading oil producing company. It produces some 2.4 million barrels of oil equivalent (boe) per day, and has reserves of 15.146 billion boe. It produces oil in all key regions of Russia. Rosneft reported (pre tax) profits for the year end 31 December 2009 of $8,519m and gross assets (as at 30 September 2010) of $87,984m.