BP Plc (BP) intends to sell its shares in Russian joint venture TNK-BP after it announced receiving bids for a potential acquisition of the holding. Information regarding the possible buyer was however not available.

TNK-BP is Russia’s leading oil company, held 50% by BP and 50% by the Alfa-Access-Renova (AAR) Consortium. BP’s intended sale follows a corporate dispute with AAR after the later dismissed BP’s deal with Russia’s state-operated oil company Rosneft last year.

The unexpected resignation of TNK-BP’s chief executive Mikhail Fridman also gave rise to fears of a new conflict between the parties. Their bonding remains uptight since their first clash in 2008 related to BP’s foreign expansion strategy and decision-making matters.

Although BP has already informed AAR as well as the London Stock Exchange regarding the potential sale, it also mentioned that a transaction was not guaranteed.

Last year, BP’s share-swap agreement with Rosneft to jointly explore and develop three offshore licenses in the prospective Siberian Artic region collapsed. The British group faces a court injunction held by TNK-BP, which alleges BP of keeping its Russian partner in the dark about the share-swap deal and violating their joint venture (JV) shareholder agreement.

Failing to complete the Rosneft deal marks a huge blow for BP, which is constantly striving to come out of the 2010 disastrous oil spill episode in the Gulf of Mexico. The deal was supposed to grant BP access to the Kara Sea, which has become a key focus for international oil majors.

It would have also allowed BP, which already owns 1% of Rosneft, to strengthen its position in the Russian hydrocarbon reserve, which was previously off limits to foreign companies.

TNK-BP has been an important source of profits for BP and represents 27% of its reserves and 29% of its production. The Russian unit has also contributed an average of 10% to BP’s profits over the last decade.

BP, which competes with Royal Dutch Shell Plc (RDS.A), holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock.

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