Will the BP-Rosneft Deal Get Called Off?

British Petroleum BP thought it was closing in on an $16 billion deal with Russia's Rosneft. It may want to rethink those plans following the resignation of Igor Sechin as Rosneft chairman. Sechin, who also serves as Deputy Prime Minister, resigned as Rosneft's chairman after Russian President Dmitry Medvedev announced his plan to separate political and business entities. Rosneft is a state-owned oil company, and Sechin's presence as chairman conflicted with his responsibilities as deputy prime minister. The resignation comes at a bad time for BP, who had hoped to ride Sechin's political connections to a successful deal. With Sechin out of the picture, hopes for the deal fall on to his successor, currently rumored to be Sergei Shishin. Shishin has similar political ties as Sechin, including links to the former KGB and Putin government. The deal, which was to be a stock swap and a joint venture exploring the Arctic for oil, is being opposed by BP's current Russian partners TNK-BP (TNBP). TNK-BP is pursuing legal remedies, arguing that BP reneged on its agreement to partner first with TNK-BP for any Russian ventures. TNK-BP has a court injunction in place and is considering seeking upwards of $10 billion in damages.