While a recent U.S. intelligence report estimates that Russia's oil-reliant economy is likely to suffer a slow decline over the next 18 years, several Am Law 100 firms are benefiting in the interim from a major reshuffling within the country's natural resources sector, while also landing other assignments involving assets once owned by the Soviet state.
In the most notable of those transactions, Moscow-based Rosneft—75 percent of which is owned by the Russian government—continued its push to become one of the world's largest oil producers by striking a deal this week to buy the half of TNK-BP it doesn't already own from the so-called Alfa-Access-Renova consortium (AAR) of Russian oligarchs for $28 billion in cash.
The agreement comes some two months after The Am Law Daily reported that Rosneft would buy the other half of TNK-BP, Russian's third-largest oil company, from British energy giant BP for $17.1 billion in cash and a 12.84 percent stake in Rosneft. All told, the two deals value TNK-BP at roughly $56 billion, making Rosneft's acquisition of the company the third-largest oil M&A deal in history and the largest ever in Russia.
As they have throughout Rosneft's drive to take full control of TNK-BP, Cleary Gottlieb Steen & Hamilton and Skadden, Arps, Slate, Meagher & Flom took lead legal advisory roles on the deal announced this week.
Cleary, which helped organize a Russia Day at the New York Stock Exchange last week, is fielding a team of lawyers on the current deal that includes M&A partners Russell Pollack and Daniel Braverman, antitrust partner Antoine Winckler, and finance partner Murat Akuyev. Also working on the matter is London-based corporate associate Gabriele Antonazzo, who will be promoted to the firm's partnership on January 1.
Larisa Kalanda is deputy chair of Rosneft's management board and serves as vice president of legal support for the company. Igor Maidannik is executive vice president of legal support at TNK-BP, where the chairman of the joint venture's board is Igor Cheremikin, who also serves as chief legal officer at Russian conglomerate Renova.
Renova, which is controlled by Russian oligarch Viktor Vekselberg, is part of the AAR consortium. The group's other members include Leonard Blavatnik's Access Industries and the Alfa Group, which is owned by fellow oligarchs Mikhail Fridman, German Khan, and Alexei Kuzmichov.
Skadden M&A partners Michal Berkner, Scott Simpson, Dmitri Kovalenko, and Linda Davies are leading a team from the firm advising both the Alfa Group individually and the AAR consortium as a whole. Other lawyers working on the matter include Skadden banking partner Mark Darley and counsel Andrew Brown, tax partner Tim Sanders, disputes partner David Kavanagh and counsel David Edwards, antitrust partner Ingrid Vandenborre, and corporate partner Clive Rough. (Offshore firm Conyers Dill & Pearman also advised the AAR consortium as a whole.)
Skadden successfully represented AAR last year in obtaining an injunction from a British high court barring BP from moving forward with a $16 billion joint venture deal with Rosneft designed to explore oil reserves off Russia's vast Arctic coast. BP's loss served as a double dose of good news for Skadden, which subsequently teamed up with Akin Gump Strauss Hauer & Feld to advise U.S. oil giant Exxon Mobil on its own $3.2 billion Arctic oil exploration deal with Rosneft last year. (That agreement came on the heels of a $1 billion Black Sea oil exploration deal struck by Rosneft and Exxon Mobil.)
As it happens, Akin corporate and tax partner Ilya Rybalkin in Moscow and corporate partner Steven Blakeley in London are advising longtime client Renova on the sale of its TNK-BP stake. Rybalkin joined Akin in 2010 from Hogan Lovells and took with him much of the firm's work for Renova. Akin has handled several international arbitration proceedings for Renova related to management disputes regarding the joint venture, which has been beset by political tensions and even special forces raids since its creation back in 2003.
