BP heads for Russian exit

I said on Tuesday that BP was playing a game of chicken with the Russian billionaires who co-own TNK-BP. What is slightly unclear this morning is whether BP has blinked or put its put foot down harder on the accelerator.

BP has had years of difficult and fractious relations with the troika of billionaires, who work through the AAR consortium. Following the almost total collapse of normal working relations with them, BP's board has decided to try and sell its 50% stake in TNK-BP, following receipt of what it calls "unsolicited indications of interest".

I understand that one of these approaches is from an unnamed Russian state business, which might offer cash and shares for the TNK-BP stake. The Russian billionaires, led by Mikhail Fridman, have also suggested to BP they would perhaps be prepared to buy the British company's stake.

Slightly confusingly, BP also sees the billionaires as potential sellers to BP of all or part of their shares in TNK-BP, although not on terms that BP's board regard as acceptable.

TNK-BP is thought to be worth around $50bn. Strikingly that is less than the $64bn valuation put on it last year by BP - which may cause concern to some BP investors.

But a year ago, the oil price was 25% higher, BP-TNK contained more cash, and there was the possibility of more value being extracted from it via a possible related deal with another Russian energy giant, Rosneft (at that time BP would have bought the billionaires' stake and then sold it to Rosneft).

If BP now succeed in selling its TNK-BP shares - and we probably won't know that til the last three months of the year - it would probably receive $25bn, including a stake in another Russian energy business.

But that is an if - given that BP's Russian billionaire partners have a history of throwing large and disruptive spanners into BP's works.