Interfax reported that TNK-BP has stopped negotiations for purchasing a 50% stake in oil and gas company Itera.

Itera said the company confirmed that TNK-BP was one of its potential partners but stressed not the only one. Itera needs a strategic investors 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.

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.

Mr Mikhail Slobodin TNK-BP executive vice-president for gas and electricity supply said that during negotiations for the 50% stake in Itera TNK-BP approach towards forming the transaction value has changed because of the significant changes in the macroeconomic situation. For instance, prices for gas have changed open discussion on the NRET for gas are continuing and discussions are underway on the law for transport pricing.

Mr Slobodin said "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%."

Therefore, TNK-BP has insisted on reducing the purchase price for the asset.

TNK-BP submitted an application in the summer with Russia Federal Antimonopoly Service for the purchase of a 50% stake in Itera Oil and Gas Company. Russia Governmental Commission for Overseeing Foreign Investment was expected to review the TNK-BP application in the near future.

(Sourced from Interfax)