Tuesday, July 24, 2012

Rosneft emerges as third bidder for BP-TKN

The young junior aid is in the car with a nervous look on her face. I tell her that we need to stop meeting like this and ask her if she is aware of the international rule which states after the third unexpected meeting a dinner date is mandatory. She responds that we are running out of time and that she has more information for me. She leans over and whispers that ZTE is only the tip of the iceberg. My driver starts the engine and we are headed back to the office in downtown Singapore.

I look at my watch and it is three minutes until midnight. I turn my attention back to the young aid as my phone rings. Unfamiliar face is on the other line, as he said he would be. He starts by congratulating us on the financing we accomplished for the X-Band radar station in Qatar. I tell him it is two minutes until midnight and that I will give him that much time to tell me what he was talking about after the black-out earlier.

He is glad to hear that I don't want to waste any time and asks me for an immediate meeting. I ask him where he suggests for us to meet. He informs me that the aid in my car will give me the location. They are connected and work for the same employer. It starts to make a little bit more sense. As I agree to the meeting and end the conversation the aid tells me the address. I nod to the guards and they inform the driver of our new destination.

I look at the young aid and try to be unimpressed by her beauty. I asked her about the additional information she claimed she has. One of the security guards signals me that the background check on her is complete. Our sources have confirmed that she is GRU. I begin to understand what is unfolding here and the most recent events make more sense now and seem to be connected. She looks deep into my eyes before she leans back in her seat. The nervousness seems to be gone after I agreed to the meeting with unfamiliar face and his employer, her employer.

She says that this includes Rosneft, the Russian state-owned oil giant, and the proposed deal Rosneft offered to BP's Russian joint venture, BP-TKN. BP, the British oil giant, claimed that it was approached by a yet unidentified source for its stake in the joint venture. After the bid was announced Rosneft showed interest in acquiring the stake which is estimated to be worth around $30 billion.

BP and its Russian partners have enjoyed frequent clashes over how to expand the venture and how to unlock value for shareholders. BP-TKN has been a cash-cow for BP, but the cash came with several lawsuits and problems along the way. BP's partners are well known oligarchs and Rosneft offered the venture a drilling contract in the Arctic Ocean which BP had to reject due to disputes with its partners.

Thanks to the dispute a potential bidding was has emerged and Rosneft now became the third player on the field. A deal with Rosneft sounds like the best option for all parties involved. President Putin, potentially one of the best politicians in modern history, runs a tight show and is very business intelligent. Foreign companies are allowed access to natural resources in partnership with state-owned companies.

Russia, under the reign of Putin, has moved in the right direction rather fast and continues to do so. Rosneft will end up with BP's share of BP-TKN and develop its assets at the same time it will unlock shareholder value. The Kremlin is very interested in this deal.

I look at the aid and ask her why I am a person of interest in this matter. She responds that I am smart enough to figure it out and that a business proposal will be made to me during the meeting. She also adds that it would be a pleasure for her to work together with me should I agree to the deal. She said her agency has only heard about me, the firm and what we are able to do and thought it was a myth until she ran into me earlier that night.

We approach the site of the meeting and the car stops. My guards are on alert and so am I. This could either be the start of an interesting business relationship or an international incident. My driver opens the door, my guards exit first followed by the aid and I am the last person out of the car. 

Photo Credit: The picture in the top left corner was downloaded for free use at freedigitalphotos.net.


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