Monday, 31 January 2011
BP: Dancing with the Bear is fraught with danger
The current TNK-BP Oligarchs are not keen on stopping BP issuing a dividend to shareholders with their money. They are not very happy about BP getting into bed with Prime Minister Putin's state champion, Rosneft.
Nor would they be, as Russia has a strange set of company laws that are routinely ignored by the Government when it suits. Even President Medvedev was accosted by a brave English Investor at Davos last week. Russia cannot escape this reputation as it is well earned. Abroad, Russian companies act strategically but not comercially, see Gazprom in the UK as a great example.
Indeed, BP must have thought about what it was doing when it took a 5% share investment from Rosneft, but the future will now be shrouded with a long road ahead of political intrigue and deal doing ahead. BP will argue this is the price to pay for getting access to the new North Sea in Russia's Arctic. It does not do much for their shareholders in the short-term. Already smashed by the accident in the Gulf of Mexico the answer has been to start dancing with the Bear.
This never ends well for the foreign companies involved; it does not encourage me to buy any shares in BP.