LONDON/MOSCOW (Reuters) – BP is in talks about buying out its Russian partners in TNK-BP, in conjunction with state-controlled Rosneft, and other options to ease passage of a stalled share swap and Arctic exploration deal, sources close to the matter said on Monday. BP has until 7 p.m. EDT Monday to complete a $16 billion share swap with Rosneft that was a key plank in a deal intended to give the British group an interest in offshore Arctic exploration leases that could contain over 40 billion barrels of oil.

With BP’s production falling as it sold fields to pay for the Gulf of Mexico oil spill, the deal was intended as signal it could still offer long-term growth.

However, AAR, the group which represents the half share of TNK-BP owned by four oligarchs, secured a legal injunction blocking the share swap, unless BP convinced Rosneft to allow TNK-BP to be BP’s vehicle in the exploration part of the deal.

Rosneft has said it does not want TNK-BP, which has no offshore experience, in the deal, and one way to get around AAR’s objections would be to buy them out.

BP chief executive Bob Dudley said that in conjunction with Rosneft he had offered $27-$28 billion for AAR’s stake in TNK-BP, but was rejected. AAR said it had not received a “serious” proposal.

Sources close to the process said while a purchase of the stake remained under discussion, BP and Rosneft viewed the oligarchs demands of over $30 billion as excessive and did not want to be seen to overpay.

Already investors and analysts are questioning the wisdom of the deal, and Dudley’s judgment.

LONDON (Reuters) – BP (BP.L: Quote, Profile, Research, Stock Buzz) will struggle to meet a Monday deadline to complete its $16 billion share swap with Russian group Rosneft (ROSN.MM: Quote, Profile, Research, Stock Buzz), leaving the companies to agree a second extension or allow the deal to fall apart.

BP Chief Executive Bob Dudley, who has been criticised by investors for the difficulties encountered in executing the deal, said he was optimistic that it would be concluded but declined to express a view on whether the deadline would be met.

“I think we will find a resolution to this over time,” Dudley told Reuters in an interview on the sidelines of a conference in St Gallen on Friday.

Analysts said the opacity around the situation made it impossible to know whether Rosneft would agree to extend the deadline but noted a lot of elements had to be agreed before the share swap could be concluded.

BP and Rosneft agreed to a $16 billion share swap and an exploration venture aimed at unlocking potentially 40 billion barrels of oil in the Russian Arctic Sea in January.

The deal, which was announced with great fanfare by BP, was supposed to mark a turning point in the London-based oil giant’s fortunes after the Gulf of Mexico oil spill.

But BP’s oligarch partners in its Russian joint venture, TNK-BP (TNBP.MM: Quote, Profile, Research, Stock Buzz), objected, saying the transaction violated an agreement BP made, when founding TNK-BP, to use TNK-BP as its principal vehicle for investment in Russia.

LONDON (Reuters) – Civil unrest in North Africa and floods in Australia conspired to hit British gas and oil producer BG Group Plc’s (BG.L: Quote, Profile, Research) profits in the first quarter and forced it to cut its output growth forecast for this year.

Underlying pretax profit fell 8 percent, the company said on Tuesday in an update that missed forecasts and knocked 3.4 percent off the company’s shares.

They traded at 1,387 pence by 09:30 a.m. after falling as low as 1,365.5, their lowest since early February.

BG said its profit excluding non-cash accounting charges fell to $1.01 billion (616.83 million pounds), compared with a forecast for $1.24 billion in a Reuters poll.

The company said gas and oil production fell 5 percent due to field maintenance and the impact of the civil disorder in Egypt and Tunisia, among the countries where it operates.

BG said extensive flooding in Queensland, Australia, where it produces gas, also weighed on output.

Chief Executive Frank Chapman said the company now only expected modest production growth in 2011. Previously, BG had indicated 7 percent per annum long-term growth.

LONDON, May 10 (Reuters) – British gas and oil producer BG Group Plc (BG.L: Quote, Profile, Research, Stock Buzz) missed forecasts with an 8 percent fall in underlying first-quarter profit and gave a weak outlook for production growth.

The update knocked more than 4 percent off the company’s shares, which traded at 1,368 pence by 0808 GMT after falling as low as 1,365.5, their lowest since early February.

BG said on Tuesday its profit excluding non-cash accounting charges fell to $1.01 billion, compared with a forecast for $1.24 billion in a Reuters poll.

The company said gas and oil production fell 5 percent due to field maintenance and the impact of the civil disorder in Egypt and Tunisia, among the countries where it operates.

Chief Executive Frank Chapman said the company now only expected modest production growth in 2011. Previously, BG had indicated 7 percent per annum long-term growth.

“The plans for a ramp-up in production in 2012 and 2013, as well as our 2020 goals, are unaffected,” he said.

An increase in British North Sea taxes also hit profit. (Editing by Dan Lalor and David Holmes)

LONDON (Reuters) – Last week’s truce between BP (BP.L: Quote, Profile, Research, Stock Buzz) and its oligarch partners in Russia has not settled the row for good, and the British oil company could yet have to pay more for its new Russian tie-up with Kremlin-backed Rosneft.

On Friday, BP agreed to execute its planned Arctic exploration venture with Rosneft through its half-owned TNK-BP (TNBP.MM: Quote, Profile, Research, Stock Buzz) venture, rather than directly.

The deal comes after Alfa-Access-Renova (AAR), the consortium of four billionaires which owns the other half, complained that the Rosneft deal breaches a shareholder agreement giving them exclusive rights to BP’s exploits in Russia.

Rosneft’s consent is required if the oligarchs, Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, are to be allowed to take their seats at the Arctic exploration table that is at the center of the BP-Rosneft tie-up.

If Rosneft agrees to a plan it has previously said it is opposed to — BP can proceed with a planned $16 billion share swap with Rosneft which was agreed as part of the Arctic exploration plan.

BP investors were cheered by the apparent end of the spat, and BP shares, which have lagged rivals by around 10 percent since the Rosneft tie-up was first announced, rose 3 percent on the news on Friday, holding onto those gains on Monday.

However, continued uncertainty is preventing a more meaningful recovery in BP’s shares, which are also weighed down by guesswork over the final bill it will face for last year’s Gulf of Mexico oil spill.

LONDON, May 4 (Reuters) – BP Plc’s (BP.L: Quote, Profile, Research, Stock Buzz) $85 million settlement with the U.S. Dept. of Justice for oil spills in Alaska in 2006 suggests the government will push for higher than expected fines related to the Gulf of Mexico oil spill.

Legal experts said the size of the $25 million penalty levied as part of the deal, when calculated on a per barrel of oil spilt basis, and the DoJ’s willingness to invoke a raft of legislation to threaten BP, set a bad precedent for BP.

“The per barrel calculus is really sort of a way of communicating to the public that the Obama administration is very serious about this stuff,” said Zygmunt Plater, Professor of Law at Boston College Law School.

BP has indicated it will face fines of under $5 billion related to the 2010 oil spill, rather than the around $21 billion it could face if it was found guilt of gross negligence – a position that most analysts have accepted.

However, if the Alaska settlement is a template, BP could end up paying out well in excess of $21 billion, as the spill at Prudhoe Bay in 2006 was dwarfed by the nearly 5 million barrels spewed from BP’s ruptured Macondo well last summer.

The two Alaska spills led to 5,078 barrels of crude spilling on the Tundra, the DoJ said, and the $25 million civil penalty BP was forced to pay, equates to over $4,900 per barrel.

The DoJ said it was the largest per-barrel penalty to date for an oil spill, although BP denied the penalty was assessed on a per barrel basis.

LONDON (Reuters) – Exxon Mobil and Royal Dutch Shell Plc reported big jumps in first quarter earnings and beat forecasts, thanks to high oil prices and healthy refining margins.

Exxon Mobil said first quarter net income rose to $10.65 billion, up 69 percent on the same period last year and ahead of an average forecast of $9.99 billion, helped by its takeover of XTO Energy last year.

Shell said current cost of supply (CCS) net income rose 22 percent to $6.9 billion in the first three months.

Brent crude was 38 percent higher in the first quarter compared with the 2010 period, while global refining benchmarks tripled.

ConocoPhillips on Wednesday reported a 43 percent rise in net income, while BP posted a 2 percent drop in replacement cost earnings due to lingering effects of the oil spill. Both companies lagged forecasts.

Replacement cost and CCS net income strips out unrealized gains related to changes in the value of oil inventories and so is comparable to net income under U.S. GAAP.

U.S. natural gas prices dropped while European prices and the price of liquefied natural gas jumped, following the Japanese earthquake, which was expected to lead to higher gas demand in that country as nuclear power is scaled back.

LONDON, April 28 (Reuters) – Recent changes in UK tax rules are forcing billions of dollars in writedowns and expected cash costs at oil companies including Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz) and BP (BP.L: Quote, Profile, Research, Stock Buzz).

The UK government raised a supplementary tax on oil producers to 32 percent from 20 percent in March and said it planned to limit tax breaks on field abandonment costs, a surprise move that prompted industry howls.

However, quarterly results statements from BP and Shell this week represent the first clear indication of the likely costs to oil companies.

BP said on Tuesday that it would take a $683 million writedown on its UK North Sea assets following the tax hike and would likely take another $400 million hit when the field abandonment rules were in place.

Shell did not have to write down its assets due to the tax hike but said on Thursday the field abandonment rules would lead to a $500 million hit, likely in the first quarter of 2012. Shell said the tax hike would have a cash cost of $210 million this year and $400 million next year, if oil prices remain above $100/barrel. BP said it would have a similar hit.

Shell Chief Financial Officer Simon Henry said the tax changes would probably limit future investment in the region and prompt the premature end of production at some fields.

“The irony is we were just beginning to start looking again at what the opportunities were, for example, tight gas in the Southern North Sea and some of the heavier oil, more difficult oil,” he told a conference call with reporters. (Reporting by Tom Bergin; Editing by Will Waterman)

LONDON (Reuters) – Royal Dutch Shell beat forecasts with a 22 percent rise in first-quarter profit, thanks to higher oil and gas prices and fatter refining margins.

Europe’s largest oil and gas company by market value said on Thursday current cost of supply (CCS) net income rose to $6.9 billion (4.1 billion pounds) in the first three months of the year.

Shell shares were up 1.0 percent in early trading, compared with a flat European oil and gas sector.

In recent years, Hague-based Shell has invested heavily in big new projects such as Qatargas 4, which are beginning to come on stream. Analysts said the effects of these were unlikely to be seen in the company’s performance until the second half.

Brent crude was 38 percent higher in the first quarter compared to the 2010 period, while global refining benchmarks tripled.

Shell, the largest shipper of liquefied natural gas, also benefited from higher LNG prices following the Japanese earthquake, which was expected to lead to higher LNG demand in that country as nuclear power is scaled back.

The Anglo-Dutch company’s result compared well with British rival BP, which posted a 2 percent fall in replacement cost net profit Wednesday, on the back of an 11 percent fall in production after selling assets to pay for the Gulf of Mexico oil spill.

LONDON (Reuters) – Royal Dutch Shell beat forecasts with a 22 percent rise in first-quarter profit, thanks to higher oil and gas prices and fatter refining margins.

Europe’s largest oil and gas company by market value said on Thursday current cost of supply (CCS) net income rose to $6.9 billion in the first three months of the year.

In recent years, Hague-based Shell has invested heavily in big new projects such as Qatargas 4, which are beginning to come on stream. Analysts said the effects of these were unlikely to be seen in the company’s performance until the second half.

Brent crude was 38 percent higher in the first quarter compared to the 2010 period, while global refining benchmarks tripled.

Shell, the largest shipper of liquefied natural gas, also benefited from higher LNG prices following the Japanese earthquake, which was expected to lead to higher LNG demand in that country as nuclear power is scaled back.

The Anglo-Dutch company’s result compared well with British rival BP, which posted a 2 percent fall in replacement cost net profit on Wednesday, on the back of an 11 percent fall in production after selling assets to pay for the Gulf of Mexico oil spill.

Investec analysts said they expected Shell to continue to outperform BP during 2011.