TNK-BP`s response to BP`s misleading press statements

Below is TNK-BP`s management response to inaccurate and misleading statements issued by BP Plc yesterday in relation to the TNK-BP Board meeting held in Paris on March 12.

BP statement: At a TNK-BP board meeting in Paris today a proposal by BP`s nominated directors which would have allowed TNK-BP to hold initial discussions with Rosneft about pursuing the Arctic opportunity, was rejected by Alfa, Access and Renova (AAR).

TNK-BP response:
The proposal made by BP-nominated directors called for excluding the share swap with Rosneft from the proposal submitted by management. The majority of the TNK-BP directors, including two independents, rejected this proposed change as it was viewed to be detrimental to TNK-BP?s interests:

- Eliminating the share swap would reduce TNK-BP`s negotiating leverage with Rosneft in relation to the Arctic exploration project and would render negotiating an equitable agreement with Rosneft virtually impossible;

- Eliminating the share swap could allow BP to proceed with its own share swap with Rosneft, thus forming an alliance between BP and one of TNK-BP?s main competitors.

- Having BP (which is a 50% shareholder in TNK-BP) become the largest private shareholder in one of TNK-BP`s main competitors would inevitably lead to conflicts of interest and new tensions between the shareholders.

BP statement: BP remains committed to finding a reasonable business like resolution to the matters raised by AAR in relation to the share swap agreement and Arctic exploration arrangements agreed between BP and Rosneft, announced on 14 January 2011. This will be through arbitration and direct talks with all parties involved.

TNK-BP response:
To date, BP has made no effort to rectify the situation created by its attempt to enter into a strategic alliance with one of TNK-BP`s main competitors, Rosneft. TNK-BP management views BP`s efforts to form such an alliance as contrary to the interests of TNK-BP and a breach of the TNK-BP Shareholder Agreement. If allowed to proceed, an alliance between Rosneft and BP would lead to significant deterioration in the competitive position of TNK-BP, worsen TNK-BP`s financial performance and growth prospects, and cause material destruction in shareholder value.

sections: Society, Economics