* Analysts value BP's stake in TNK-BP at $25 bln
* AAR expected to place bid before Weds deadline
* Rosneft also likely to bid
By Melissa Akin
MOSCOW, Oct 15 Bidding will open this week for
BP's half of Russian oil company TNK-BP, with
state oil major Rosneft tipped as the likely buyer of
the British oil major's stake in the fraught but lucrative joint
BP, whose chief executive Bob Dudley is due in Moscow on
Monday for a meeting of foreign investors with Prime Minister
Dmitry Medvedev, has booked $19 billion in dividends from its
original investment of $7 billion in 2003.
It now stands to make a further $25 billion by selling its
stake in TNK-BP, Russia's No.3 oil firm, after relations broke
down with the billionaire quartet that owns the other half
through their AAR consortium.
BP put its stake up for sale in June and the four tycoons -
Mikhail Fridman, German Khan, Viktor Vekselberg and Len
Blavatnik - are expected to bid by Wednesday, when BP becomes
free to sell to a third party.
State oil company Rosneft could follow suit. Its
powerful chief, Igor Sechin, an ally of President Vladimir
Putin, told the Financial Times last week that the Kremlin chief
had blessed the acquisition of BP's stake by Rosneft.
BP has said that it could also take a direct equity stake in
Rosneft with some of the sale proceeds, which Sechin has
described as a means of achieving government privatisation aims.
Analysts say a bid by AAR could amount to little more than a
price pitch for a sale of its own stake in TNK-BP.
Both bids would be viable, say bankers, but it would require
a clear signal from the Kremlin regarding the preferred outcome
of the BP stake sale for financing to fall into place.
Rosneft has held talks with a dozen banks on raising as much
as $15 billion in debt financing to back a cash and equity bid.
AAR, meanwhile, is confident that it could fund its bid by
leveraging up TNK-BP, which has low debts and huge cash flows.
AAR, which had been saying it wanted to buy BP's stake since
the UK company announced its intent to sell in June, notified BP
last week of its intent to sell its own stake, the first outward
sign that Rosneft had a chance at getting all of TNK-BP.
AAR, bracing for rejection of its bid, is also considering a
public offering of part of its TNK-BP stake. Rosneft is the only
apparent buyer likely to mount a bid for its full stake.
"They are saying (to BP), you sell, and we'll tag along.
They don't want to be left alone with Rosneft," said a source
close to the BP-Rosneft negotiations.
The best outcome for Rosneft is, the source said, "to pay
through the nose" and finance a buyout of both stakes in TNK-BP
at a potential cost of $50 billion or more.
Even if bids are quickly made and accepted, the path to
state ownership of TNK-BP may not be smooth.
Deputy Prime Minister Arkady Dvorkovich, a rival to Sechin
for influence on energy policy and strong advocate of
privatisation, has opposed Rosneft's bid, which would require
government approval to go through.
TNK-BP management insists that the long-running conflict
between BP and AAR has no impact, but the company has suffered a
number of operational setbacks and management upheaval.
Sources close to TNK-BP said a decision to replace Alexander
Dodds, a former ExxonMobil executive who quit his
upstream post just a year after joining, with a former executive
of Vekselberg's Renova group showed the oligarchs had tightened
their grip on operations just ahead of the sale.