BP's Russian venture unveiled a surprise bid on Friday for a $9 billion stake in state-controlled oil firm Rosneft, just as its top executives arrived in Moscow to meet President Vladimir Putin.
TNK-BP, co-owned by BP Plc and a group of Russian billionaires, said it would bid next week for a 9.44 percent stake in Rosneft, the first lot in an auction of assets of bankrupt oil firm Yukos. "We are bidding to win," TNK-BP spokesman Alexander Shadrin said before Putin met BP Chief Executive John Browne and his successor, Tony Hayward.
Putin holds sway over the fate of major Russian oil projects, and the blessing of the Kremlin chief is regarded as a necessity for any strategic deal to stick. "This private company is actively developing in Russia, where it has increasing reserves, production and profits," Interfax news agency quoted Putin as saying at the meeting.
Browne said BP planned to broaden its activities in Russia and its partnership with leading Russian energy firms. The Kremlin has taken over key oil and gas assets over the last three years at the expense of foreigners and billionaire "oligarchs". Speculation is rife that Putin will make TNK-BP's Russian partners an offer they can't refuse, allowing Rosneft or gas monopoly Gazprom to buy them out.
Energy analysts were caught off guard by TNK-BP's bid and wondered whether it was merely a ploy to curry favour by making up the numbers at the auction, which needs at least two bidders to be valid, and which Rosneft is widely tipped to win.
TNK-BP denied mounting a dummy bid: "We're going into it seriously," said Peter Henshaw, vice-president for communications. "It's about building stronger relationships and acquiring a strategic asset." TNK-BP plans to fund the bid from its own resources and with cash from its owners - BP and the Russian billionaires.
A spokesman for Yukos's receiver confirmed that more than one bid had been registered, and a source close to the process said TNK-BP had put up a deposit of about $1.5 billion.
Rosneft did not comment on TNK-BP's bid, but said Rosneft president Sergei Bogdanchikov had met Browne on Friday to discuss co-operation on projects and in shareholdings. Browne did not see Gazprom's bosses, having met them earlier this month.
Rosneft has already lined up a $22 billion jumbo loan from eight Western banks to buy assets from Yukos, whose former main owner Mikhail Khodorkovsky is serving eight years in a Siberian jail following a conviction for fraud. Yukos shareholders say the Kremlin brought down Yukos to punish Khodorkovsky for his political ambitions. They have promised to sue to anyone buying its assets.