BP loses again in Arctic deal to ExxonMobil: sources

ExxonMobil won access to the Arctic Laptev Sea fields, where Rosneft's prospective reserves amount to 36 billion barrels of oil equivalent, under a deal last month, but three industry sources said BP had also been in talks with Rosneft to explore several blocks there.

Setbacks have become the norm for BP's activities in Russia, where it formed a joint venture, TNK-BP, in 2003, by pooling its assets with those of four Soviet-born billionaires. It is currently selling out of that troubled venture to Rosneft.

TNK-BP became a battle of wills between the British firm and the tycoons, who blocked BP's first attempt to form an Arctic exploration deal with Rosneft, a deal that BP executives had compared to the opening of a new North Sea.

Having negotiated that venture, which the tycoons said was in breach of the TNK-BP agreement, BP had to step aside and watch ExxonMobil take the spoils in 2011.

Now Rosneft has preferred ExxonMobil for the Laptev fields, even though BP will become a significant shareholder of Rosneft in April and name two directors to its board as part of the takeover of TNK-BP.

The government has even offered Dudley a seat on the board at state controlled Rosneft, headed by Igor Sechin, an influential ally of President Vladimir Putin.

BP and Rosneft were unable to respond immediately to a request for comment.

BP has been left a bystander as a rush for Arctic drilling deals got under way. Italy's Eni and Norway's Statoil have also struck partnerships with Rosneft, trading technology and capital for access to tens of billions of barrels of prospective offshore Arctic reserves.

The US$55 billion cash-and-share deal to sell TNK-BP to Rosneft, freeing BP from its fractious partnership and making it a 20-percent shareholder in Rosneft, appeared to promise a second shot at an exploration deal with Rosneft.

Sechin has said Rosneft would remain interested in upstream projects with the British major after the takeover, “which we will develop with BP as a partner, not as a shareholder.”

Now, out of nearly 30 Arctic licence areas held by Rosneft, all but five have been parcelled out in upstream joint ventures with other companies, leaving slim pickings for BP.

The loss of the Laptev blocks to ExxonMobil, coupled with concerns about BP's role in the integration of TNK-BP, prompted Dudley to fly to Moscow in the middle of February, the sources said.

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