BP said Friday it would pursue the sale of its 50% stake in the troubled Russian venture TNK-BP after receiving a number of unsolicited indications of interest from potential buyers.
The announcement comes just days after its Russian partners, AAR, said they would be prepared to buy out BP's stake in Russia's third-largest oil producer.
In a brief statement, BP said it has notified AAR of its intention to pursue a potential sale, but added that there was no guarantee that any transaction would take place.
BP's shares, which have languished on investor concern over the final cost of its 2010 Gulf oil spill and the future of TNK-BP, spiked by up to 5% in London after the announcement and were trading 2.7% up at 405.65 pence by 0932 GMT.
"We have had indications of interest, and we'd like the ability to explore those [indications]," spokesman David Nicholas told Platts, adding that there had been "more than one" indication of interest.
"A decision will be driven by what is in the interests of BP shareholders. We'd like to be able to pursue the option of a sale, and if we decide that's in the interest of our shareholders, that's what we'll do," he said.
Nicholas said that it was too early to assess whether any discussions would ultimately turn into an offer or a sale in the end.
"It's way too early. We've had indications of interest, we'd like the ability to explore those. This is the only process involved, because under the terms of our shareholder agreement we are bound by a duty of confidentiality."
He said the process could take "some months," adding that the option of retaining its stake in TNK-BP was still on the table. Operationally, Nicholas said in the meantime there would be no change in TNK-BP's activities on the ground. "As far as we're concerned, there is no change at all to TNK-BP," he said.
AAR INTEREST
Earlier this week, AAR CEO Stan Polovets said that the 50:50 ownership structure of TNK-BP had run its course and that the Russian company was looking into various options to change it.
Polovets said that AAR was ready to cut its stake in the joint venture in exchange for a stake in BP, adding it was yet to be decided what stake AAR would retain if the option was pursued.
Another option under consideration was the Russian group buying out BP's stake in TNK-BP, Polovets said. He also did not rule out bringing in a third partner but added that AAR has not conducted talks with a potential third party yet.
There has been some speculation that Russia's state-owned oil giant Rosneft might be seeking a share in TNK-BP. Such a deal would allow the revival of a mega alliance between Rosneft and BP, which collapsed last year.
However, in an interview Wednesday with Russian daily Kommersant, Mikhail Fridman, one of the co-owners of AAR, said it was not likely that Rosneft would buy a stake in TNK-BP.
"They [seem to] have other interests now, and besides [the failed deal] may have left a bad taste in their mouth," he was quoted as saying. On Monday, Fridman tendered his resignation as TNK-BP's interim CEO and chairman of the management board.
BP DEBTS
Analysts said a sale would wipe out BP's current debts.
"Our assumed sale price of $27 billion in cash could wipe out all of BP's debts -- we think if we see a sale to Rosneft or Gazprom then they will get shares at least in part," analysts at London-based Investec said in a note.
However, a sale would see BP lose a large chunk of its production -- in 2011, TNK-BP's output of 994,000 b/d of oil equivalent was 29% of BP's total average production of 3.45 million boe/d.
Analysts at UK-based Jeffries said BP should exit the venture. "We value BP's share at $30 billion, around 26% of current market capitalization," they said.
"Given the collapse of trust and corporate governance at the company we believe BP should exit and reinvest in more profitable areas with less political risk, if it can achieve something close to fair value for the stake," they said.
Analysts at Citi said one possible solution might be that AAR seeks to buy out BP, and then perhaps itself sell that stake on to another Russian company.
