President Vladimir Putin said he had "mixed feelings" over the mega energy co-operation deal between BP and Russian state giant Rosneft but had eventually given his blessing to the transaction. Putin said that the deal had minuses as it did not correspond to the government's avowed aim of keeping the state's participation in the economy in check.
But he also said that Russia wanted to help BP which had suffered due to an "eternal conflict" at its Russian joint venture TNK-BP which had sometimes degenerated into "hand-to-hand fighting" between the shareholders. "I will not hide that myself and the government had mixed feelings when this project was raised," Putin told the Valdai Club of experts on Russia late on Thursday in comments posted on the Kremlin website on Friday.
"It was a difficult choice but in the end we agreed with the idea of Rosneft and BP - this was a joint suggestion that they could work together." BP announced this week it had agreed to sell its half of TNK-BP to Rosneft for $17.1 billion (13.1 billion euros) in a cash-and-share deal that will also bring its stake in Rosneft to 19.75 percent.
Meanwhile, Rosneft has agreed terms to pay $28 billion in cash for the other 50 percent in TNK-BP held by a group of Russian oligarchs. The deal as a whole is valued at $61 billion, making it one of the biggest deals in history. Putin said that a "minus" was that a company that is majority state owned would increase "its presence on the market thanks to a foreign partner" while the Russian-owned shares in TNK-BP could be swallowed up by Rosneft. "This does not correspond to our trend of restraining the growth of the state sector."
But Putin revealed that BP had "asked us for help many times." He said: "They came to the government and said that they wanted to cooperate with Rosneft. We could not say 'no' as that would be seen as boxing them under TNK with whom they had this eternal conflict."