BP secured a last-minute extension to its US$10 billion tie-up with Rosneft yesterday as the oil giant faced down environmental protesters and a shareholder rebellion at its annual meeting.
BP now has until May 16 to find a way out of the controversy threatening its planned share-swap and Arctic exploration programme with the state-owned Russian group.
The deadline extension was a modicum of good news against the backdrop of BP's first meeting with shareholders since last year's Deepwater Horizon disaster which killed 11 people and unleashed the worst oil spill in history.
Protesters, including Texan fisherwomen who covered themselves in oil, were barred from the London AGM, where BP's board faced sharp questioning on its safety record.
Parrying questions about the company's handling of the Rosneft deal, embattled chief executive Bob Dudley admitted for the first time that BP has offered to buy out the TNK-BP Russian joint venture proving so troublesome to its Rosneft plans.
BP's partners in TNK-BP claim the Rosneft deal violates TNK-BP's shareholder deal.
The four billionaire oligarchs of the AAR investment consortium have launched a legal challenge to the deal, and a tribunal has upheld the injunction against the Arctic exploration and is still considering the share-swap.
Attempts to settle outside court have come to nothing.
"We have offered them participation in the Arctic; we have offered cash; we have offered participation to TNK-BP in international ventures; and we have even jointly offered, with Rosneft, a fair offer for their company," Dudley said.
"We are not going to offer large amounts or major shareholdings."
AAR denied that BP has made any realistic suggestions and claims it has no interest in selling out of TNK-BP.
Stan Polovets, the AAR chief executive, said: "Contrary to what Mr Dudley said at the AGM, BP has never made a constructive proposal to turn the Rosneft deal over to TNK-BP as our shareholder agreement requires."
With yesterday's deadline extended, Rosneft said it had no plans to look for another oil major to replace BP.
- IndependentBy Sarah Arnott