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BP reaches $26bn deal with Russian oil titan Rosneft

State-owned champion becomes world’s largest oil producer.

BP today agreed to sell its 50 per cent holding in its Russian joint venture TNK-BP to Rosneft for a cash-and-shares deal worth a reported $26.8 billion (£17.8bn).

In a statement, BP announced it would receive $17.1bn (£10.7bn) in cash and an initial $9.7bn (£6bn) in shares worth a 13 per cent stake in Rosneft.

BP declared it would reinvest a further $4.8bn (£3bn) of the windfall into purchasing a further 5.7 per cent stake from the Kremlin, boosting its overall holding to just under 20 per cent.

As part of the deal, BP will also be given two seats on the Russian company’s nine-person board.

“This is an important day for BP. Russia is vital to world energy security and will be increasingly significant in the years to come”, announced BP chairman Carl-Henric Svanberg.

“Rosneft is set to be a major player in the global oil industry. This material holding in Rosneft will give BP solid returns”, he added.

The landmark deal is seen as a favourable exit for BP from what has been lucrative but testing venture. The dysfunctional relationship between BP and its erstwhile partners AAR – a consortium of Soviet-born oligarchs – came to a head in 2011, when the group attempted to block a joint Arctic drilling venture between BP and Rosneft.

Furthermore, BP’s 20 per cent stake in Rosneft could go some ways towards securing the company’s future in Russia, particularly in securing favourable Arctic and North Sea deals.

“BP intends to be a long term investor in Rosneft – an investment which I believe will deliver value for our shareholders over the next decade and beyond”, said BP chief executive Bob Dudley.

However, there are concerns that BP will have little meaningful leverage over the Kremlin-owned Rosneft, despite its presence on the company’s board of directors.

Accompanying the deal, Rosneft released a statement reiterating its intention to purchase the remaining 50 per cent stake in TNK-BP from AAR. The $28bn cash deal (£17.5bn) – expected to be announced on Thursday – was preliminarily agreed upon last week, with both parties signing a Memorandum of Understanding on Tuesday.

With full ownership of BP-TNK, Rosneft would control almost half of Russia’s total oil output, producing in excess of 4 million barrels of oil and gas per day – 1.7 million more than US-owned Exxon Mobil.

However, the transfer of a considerable slice of Russia’s private oil production into state hands raises profound political concerns. Before the BP deal, the Kremlin held a 75 per cent stake in the energy giant and Igor Sechin – the company’s CEO – currently serves as Vladimir Putin’s deputy prime minister.

Alex Ward is a London-based freelance journalist who has previously worked for the Times & the Press Association. Twitter: @alexward3000

Photo: Getty Images
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When will the government take action to tackle the plight of circus animals?

Britain is lagging behind the rest of the world - and innocent animals are paying the price. 

It has been more than a year since the Prime Minister reiterated his commitment to passing legislation to impose a ban on the suffering of circus animals in England and Wales. How long does it take to get something done in Parliament?

I was an MP for more than two decades, so that’s a rhetorical question. I’m well aware that important issues like this one can drag on, but the continued lack of action to help stop the suffering of animals in circuses is indefensible.

Although the vast majority of the British public doesn’t want wild animals used in circuses (a public consultation on the issue found that more than 94 per cent of the public wanted to see a ban implemented and the Prime Minister promised to prohibit the practice by January 2015, no government bill on this issue was introduced during the last parliament.

A private member’s bill, introduced in 2013, was repeatedly blocked in the House of Commons by three MPs, so it needs a government bill to be laid if we are to have any hope of seeing this practice banned.

This colossal waste of time shames Britain, while all around the world, governments have been taking decisive action to stop the abuse of wild animals in circuses. Just last month, Catalonia’s Parliament overwhelmingly voted to ban it. While our own lawmakers dragged their feet, the Netherlands approved a ban that comes into effect later this year, as did Malta and Mexico. Ringling Bros. and Barnum & Bailey Circus, North America’s longest-running circus, has pledged to retire all the elephants it uses by 2018. Even in Iran, a country with precious few animal-welfare laws, 14 states have banned this archaic form of entertainment. Are we really lagging behind Iran?

The writing has long been on the wall. Only two English circuses are still clinging to this antiquated tradition of using wild animals, so implementing a ban would have very little bearing on businesses operating in England and Wales. But it would have a very positive impact on the animals still being exploited.

Every day that this legislation is delayed is another one of misery for the large wild animals, including tigers, being hauled around the country in circus wagons. Existing in cramped cages and denied everything that gives their lives meaning, animals become lethargic and depressed. Their spirits broken, many develop neurotic and abnormal behaviour, such as biting the bars of their cages and constantly pacing. It’s little wonder that such tormented creatures die far short of their natural life spans.

Watching a tiger jump through a fiery hoop may be entertaining to some, but we should all be aware of what it entails for the animal. UK laws require that animals be provided with a good quality of life, but the cruelty inherent in confining big, wild animals, who would roam miles in the wild, to small, cramped spaces and forcing them to engage in unnatural and confusing spectacles makes that impossible in circuses.

Those who agree with me can join PETA’s campaign to urge government to listen to the public and give such animals a chance to live as nature intended.


The Right Honourable Ann Widdecombe was an MP for 23 years and served as Shadow Home Secretary. She is a novelist, documentary maker and newspaper columnist.