Russian Roulette - Investor Briefing

On 22nd October BP plc announced it had agreed heads of terms to sell its 50% stake in TNK-BP - their partner in Russia for much the last troubled 15 years - to Rosneft, a company owned largely by the Russian State. BP's official announcement of the proposed deal focusses on the benefits of Rosneft's 2011 oil reserve additions and their sizeable dividend of 25%. However, there are a number of areas of concern for BP shareholders including the potential impacts of a proposed Russian government divestment in 2015, a threat to Rosneft's continued dominance in the Russian Arctic, allegations of a lack of corporate transparency, and Rosneft's questionable environmental record. This briefing explores these risks in more detail.