1. TNK-BP can not afford to lose this deal to RDS, XOM, CHV. That hurts AAR as well 2. Neither can the Russian govt, who'll pressure AAR 3. BP will have to pay a premium and settle with AAR to grant them a waiver. 4. AAR knows it doesn't have the expertise, all they want is money (they are after all billionaires)
Prediction: BP will settle for about $500 Million for AAR to grant them a waiver to do the deal.BP going up to $50 by 4/12
What if there is still ill will with Dudley and AAR- BP decides the give Rosneft 16 billion in stock which they use to buy out the billioniares. Then you have BP with Rosneft (putin-government) no thorny partner -- Rosneft with 5% of BP and BP with 10% of Rosneft. BP gains because they get out of bad partnership and Russia gains with BP/ARCO cold weather drilling experience. I like it
Nothing in Russia gets resolved quickly. Even if in the end BP pays off the AAR partners and somehow does this deal, its already one more nail in the coffin for the credibility and competence of BP senior management. I think shareholders will be lucky if the stock sees $50 by the end of the year or early next year.
Let's hope not. I do believe they have to do something by mid-April as that is when the temporary injunction expires. What happened yesterday was an extension of the London High court decision a few weeks back. I don't know the speed of how things are done in Russia, but I do think that the government and Rosneft will not wait.