British Petroleum In Russia
BP International Oil and Gas Company is one of the world's leading international oil and gas companies. Provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving, and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. Key facts
Around 80 countries of operation
The Economic value $403.3 billion
Operating cash flow $21.1 billion
Barrells of oil produced per day 3.2 million
Proved reserves 18 million barrels of oil eq.
BP is one of the world's leading international oil and gas companies. provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving, and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging They believe that the best way for BP to achieve sustainable success as a company is to act in the long-term interests of their partners and society. They develop and deploy technologies that they expect will make the greatest impact on their business. The BP Energy Outlook 2035 contains the projections of future energy trends and factors that could affect them, based on the views of likely economic growth.
BP’s involvement in Russia
What happens next?
The fact is that BP has always been willing to take calculated risks whether its going into Russia Its partnership with AAR started creaking in 2007. AAR claimed BP was blocking its ambitions for TNK-BP, including by resisting its attempts to expand it outside Russia. On 1 June 2012, BP announced its intention to pursue a sale of its shareholding in TNK-BP. In October 17th it became clear that AAR, a consortium of Russian billionaires, had agreed to sell its half of TNK-BP to Rosneft for $28 billion. The deal was completed on 21 March 2013. BP received cash (approximately $12.5 billion) and shares (18.5% of Rosneft) in consideration for its 50% stake in TNK-BP. This resulted in BP holding 19.75 per cent of Rosneft stock, when aggregated with BP’s 1.25 per cent pre-deal holding. Although TNK-BP contributed nearly a third of BP’s oil-and-gas output and 10% of its profits, prospects for growth are limited in almost every way, so the outcome BP paid $8 billion for the stake in 2003, earned more than $19 billion in dividend. BP may need the money to help pay for the Deepwater Horizon oil spill Through a shareholding with Rosneft, BP would have access to Russia’s huge reserves of oil and gas.
Why Russia? Why Rosneft?
Rosneft is the largest oil company in Russia and the largest publicly traded oil company in the world based on hydrocarbon production volume. They have assets in all key hydrocarbon regions of Russia. Rosneft and Gazprom, the majority of whose shares are owned by the Russian state, have exclusive rights to explore and develop significant hydrocarbon resources in the Russian Arctic offshore. BP now holds a 19.75% stake in the company. Why Rosneft?
The US has put restrictions on offshore drilling after an explosion at the Deepwater Horizon oil rig in the Gulf of Mexico, so naturally companies have had to look further afield. So it isn’t surprising that BP has turned its attention to Russia. Arctic shelf may hold up to seven per cent of the world’s explored oil reserves and thirty per cent of its gas reserves makes Rosneft an extremely attractive corporate partner. BP’s shareholding in Rosneft allows them to benefit from a diversified set of existing and potential projects in the Russian oil and gas sector. In the share swap deal BP is due to gain access to some 48,263 square miles of unexplored basins in the South Kara Sea. Bp is positioned to contribute to Rosneft’s strategy through the sharing of technology, people, processes and best practice. BP boasts that it gets on famously with Russia’s leaders, which would surely help. BP...
Please join StudyMode to read the full document