Problems continue to pile up at BP. Last week an arbitration tribunal blocked its joint venture with Russia’s Rosneft. The oligarchs who own half of BP’s other Russian venture, TNK-BP, had argued that BP’s Rosneft deal violated the terms of their alliance with BP, whereby both parties can only pursue new Russian projects through TNK-BP. BP still hopes to press ahead with a planned share swap with Rosneft. This week, there were reports that BP’s managers could face manslaughter charges over last year’s Gulf of Mexico oil spill.
What the commentators said
The tie-up with Rosneft to explore the oil-rich Arctic was supposed to herald the “re-making” of the UK oil giant after the oil spill, said Sarah Arnott in The Independent. But it has “descended into a shambles”.
CEO Robert Dudley told the BP board that the oligarchs “could be squared at a commercial price”, said Damian Reece in The Daily Telegraph. But he misjudged their tactics. “At best” BP will now have to pay a much higher price to move forward with Rosneft than originally anticipated. BP could try to buy out the other half of TNK-BP, added Dominic O’Connell in The Sunday Times, although they insist they don’t want to sell.
As for the US problems, manslaughter charges make it more likely BP will be charged with gross negligence, said Tom Bergin on Reuters.com. That implies the maximum fine it could face rises from $5bn to $21bn. It could “open the floodgates to legal claims” worth billions.
BP: 465p; 12m change -1.46%