BP-Rosneft Deal: How to Become a Kremlinologist and Lose Your Shirt
Craig Pirrong submits: The NYT business section ran a fairly long article on the BP-Rosneft fiasco. As a Russian noted in a comment to my earlier post on the subject, the Times piece supports my argument that BP (BP) was counting on Russian lawlessness to overcome the black-and-white of its agreement with its AAR Russian partners: This time, it had appeared that Mr. Dudley and BP might have protection from higher-ups. Rosneft’s chairman, Igor I. Sechin, is also a powerful deputy prime minister.A senior BP official with knowledge of the company’s work in Russia said BP lawyers had understood that the agreement with Rosneft (RNFTF.PK) was “on the edge” of violating the TNK-BP shareholder agreement. But the deal also appeared to coincide so strongly with Russia’s national interest that the company assumed the Kremlin would discourage the Russian shareholders in TNK-BP from making trouble. [Translation: "discourage"="Threaten with adjoining cells in Chita."] TheComplete Story »
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