Itera confirms TNK-BP has ended negotiations on 50% stake
MOSCOW. Nov 17 (Interfax) - TNK-BP has stopped negotiations for purchasing a 50% stake in oil and gas company Itera , Itera said.
Itera confirmed that TNK-BP was one of its potential partners, but stressed not the only one. Itera needs a strategic investor who will be involved in the business, not just financially, but enabling the company to expand its production base and providing new momentum for growth, Itera said.
A spokesperson for TNK-BP told Interfax earlier that TNK-BP had stopped negotiations for purchasing a 50% stake in Itera owing to the significant differences in both sides' positions concerning the transactions' terms.
TNK-BP's executive vice-president for gas and electricity supply, Mikhail Slobodin, said that during negotiations for the 50% stake in Itera, TNK-BP's approach towards forming the transaction's value has changed because of the significant changes in the macroeconomic situation. For instance, prices for gas have changed, open discussion on the NRET (natural resources extraction tax) for gas are continuing, and discussions are underway on the law for transport pricing.
"One of the assets in which Itera has an interest, is in such a state that the increased NRET might be applied [this concerns Purgaz, in which Gazprom owns 51% and Itera holds 49%]," Slobodin said. Therefore, TNK-BP has insisted on reducing the purchase price for the asset.
TNK-BP submitted an application in the summer with Russia's Federal Antimonopoly Service (FAS) for the purchase of a 50% stake in Itera Oil and Gas Company. Russia's Governmental Commission for Overseeing Foreign Investment was expected to review the TNK-BP application in the near future.
Several sources earlier said that that TNK-BP might transfer asset assets and cash funds for paying off debt to Itera in order to pay for the stake.
Itera Oil and Gas Company is part of Cyprus-registered Itera Group, which is controlled by Igor Makarov.
TNK-BP is the third biggest producer of oil in Russia. Britain's BP and the Russian consortium Alfa-Access-Renova (AAR) own TNK-BP on a parity basis.
