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BP and Rosneft: Unhappy families

October 18, 2012

CHANGING partners in Russia can be a fraught affair, to which the tribulations of Anna Karenina are as good a guide as any. But sometimes there is no choice. BP?s relationship with a group of oligarchs who owned half of TNK-BP, the company?s Russian joint venture, had broken down so completely that it was only a matter of time before one side or the other was forced to quit. In the event both seem to be getting out, to be replaced by the firm at the root of the trouble between them, Rosneft, Russia?s state-controlled oil giant.On October 17th it became clear that AAR, a consortium of Russian billionaires, had agreed to sell its half of TNK-BP to Rosneft for $28 billion. The next day, as The Economist went to press, Rosneft reportedly offered BP the same amount for its half of the joint venture. The offer?which has yet to be approved by BP?would be paid partly in cash (up to $15 billion) and the rest in shares. It would make Rosneft the world?s largest publicly traded oil producer, and give BP a stake of over 10% in the new supermajor.It has been inevitable that one partner would quit TNK-...

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