LONDON: The board of UK energy company BP PLC has struck a deal to swap its profitable but troublesome Russian oil venture TNK-BP for a big stake in Rosneft, the Kremlin-controlled energy company, a person familiar with the matter said yesterday.
The person said that the sale of BP's half of TNK-BP was expected to net the company between $10 to $15 billion in cash as well as a 15 to 20 percent stake in Rosneft, Russia's largest producer of oil. The person said that the ranges were approximate because the parameters of the deal were still being worked out. He spoke on condition of anonymity before an official announcement which he said the companies hoped to make "soon."
Such a deal would allow BP to exit its troubled partnership with the consortium of Russian billionaires which controls the other half of TNK-BP while keeping a presence in Russia, a country responsible for producing nearly 10 million barrels of crude every day. But the deal would also bring the British company much closer to the Kremlin; Rosneft is run by former deputy prime minister Igor Sechin, a longtime aide to Russian President Vladimir Putin, and BP's shareholders may worry about the political dimensions of the deal.
Britain's The Sunday Telegraph said that five of BP's leading investors, which it didn't identify by name, had qualms about the move.
Rosneft declined to comment when reached by phone late Sunday.
BP backs deal to swap TNK-BP for Rosneft stake
BP backs deal to swap TNK-BP for Rosneft stake
European gas prices soar almost 50% as Iran conflict halts Qatar LNG output
- Analysts warn prolonged disruption could push prices higher
- Some shipments of oil, LNG through Strait of Hormuz suspended
- Benchmark Asian LNG price up almost 39 percent
LONDON: Benchmark Dutch and British wholesale gas prices soared by almost 50 percent on Monday, after major liquefied natural gas exporter Qatar Energy said it had halted production due to attacks in the Middle East.
Qatar, soon to cement its role as the world’s second largest LNG exporter after the US, plays a major role in balancing both Asian and European markets’ demand of LNG.
Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway.
Europe has increased imports of LNG over the past few years as it seeks to phase out Russian gas following Russia’s invasion of Ukraine.
Around 20 percent of the world’s LNG transits through the Strait of Hormuz and a prolonged suspension or full closure would increase global competition for other sources of the gas, driving up prices internationally.
“Disruptions to LNG flows would reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, vice president, gas and LNG research at Wood Mackenzie.
The Dutch front-month contract at the TTF hub, seen as a benchmark price for Europe, was up €14.56 at €46.52 per megawatt hour, or around $15.92/mmBtu, by 12:55 p.m. GMT, ICE data showed.
Prices were already some 25 percent higher earlier in the day but extended gains after QatarEnergy’s production halt.
Benchmark Asian LNG prices jumped almost 39 percent on Monday morning with the S&P Global Energy Japan-Korea-Marker, widely used as an Asian LNG benchmark, at $15.068 per million British thermal units, Platts data showed.
“If LNG/gas markets start to price in an extended period of losses to Qatari LNG supply, TTF could potentially spike to 80-100 euros/MWh ($28-35/mmBtu),” Warren Patterson, head of commodities strategy at ING, said. The British April contract was up 40.83 pence at 119.40 pence per therm, ICE data showed.
Europe is also relying on LNG imports to help fill its gas storage sites which have been depleted over the winter and are currently around 30 percent full, the latest data from Gas Infrastructure Europe showed. In the European carbon market, the benchmark contract was down €1.10 at €69.17 a tonne
