Rosneft turns from Linklaters and Freshfields to Baker Botts for Russian oil deal

Baker Botts has returned to advise Russian state-owned energy giant Rosneft after adding former a former Linklaters lawyer and Rosneft contact to its team.

Slaughter and May advised North Atlantic Drilling Ltd (NADL) and Seadrill Ltd on its agreement with Rosneft to break into the Russian drilling market.

In recent years the energy company has typically turned to magic circle firms Linklaters, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) but Baker Botts won the mandate to agree nine offshore drilling units with NADL.

The firm added former Linklaters corporate counsel Mikhail Semyonov, who led on the deal with Moscow partner Jason Bennett and London M&A partner Derek Jones, to its ranks in January this year.

As part of the deal, Rosneft will acquire a significant chunk of NADL equity while NADL will be awarded Russian drilling contracts for 35 rig years.

Slaughters is advising NADL and Seadrill, which currently owns 70 per cent of the outstanding shares and will remain the largest shareholder in NADL after the initial transaction.

Slaughters corporate partners Hywel Davies and Tim Boxell led the team advising NADL and Seadrill alongside competition partner Anna Lyle-Smythe. They were supported by corporate associates Victoria MacDuff, Matthew Hamilton and Liam Townson as well as competition associate Natalie Cooksey, and tax associate Ed Milliner.

The team worked with Norwegian firm Wiersholm and Russian firm ALRUD on the deal. The Wiersholm team was led by partner Erling Lind and the ALRUD team was led by partner Alexander Zharskiy who is supported by senior associate Andrey Zharskiy

Rosneft has been busy in recent years. It signed an exploration agreement with America’s ExxonMobil in 2012, turning to then Linklaters counsel Semyonov (17 December 2012).

That year it also racked up deals with Norwegian rival Statoil to explore oil and gas fields in the Arctic (2 September 2012), and completed a strategic joint venture with natural gas producer Itera to jointly develop gas fields in the Russian Arctic (23 August 2012). 

Background to the deal

The magic circle firms have clung on to enviable oil and gas mandates in the London and Russian markets in recent years and Rosneft is another strong contact. Freshfields and Linklaters are both key advisers to the Russian giant and both were reappointed to BP’s last panel in 2011 (26 February 2011).

Linklaters acted for BP when it signed a £10bn share swap deal with Rosneft in early 2011, led by partner Moscow corporate partner Grigory Gadzhiev while Rosneft retained Freshfields for the deal (24 January 2011).

That deal folded as the agreement sparked a heated dispute between BP and the Russian investors in its existing joint venture TNK-BP. BP turned to Linklaters once again for arbitration counsel as it battled it out in the courts with Alfa-Access-Renova (AAR), the Russian oligarch consortium behind TNK-BP. Skadden Arps Slate Meagher & Flom acted for AAR (12 May 2011).

Linklaters has been conflicted out of several disputes launched by Rosneft because of its BP relationship but Gadzhiev is now client relationship partner for Rosneft. He recently acted for Rosneft on its four new ventures to explore oil and gas fields in the Arctic and Pacific oceans with Statoil (3 September 2012).

Moscow-based corporate counsel Semyonov was a part of that team and then led a team for Rosneft in December when it signed an agreement with ExxonMobil to explore tight oil reserves in western Siberia (17 December 2012).

This year he moved to Baker Botts, adding firepower to the firms’ longstanding relationship with Rosneft. The partner is understood to have sweetened his arrival at Baker Botts by bringing over several client matters, though the firm had been instructed with the Seadrill deal before his arrival.

Over the past few years the ­majority of Baker Botts’ work in Russia has switched from ­advising foreign companies on Russian-based matters to 90 per cent of its new business coming from Russian companies. Longstanding relationships ­include Rosneft, Gazprom and Gazprombank.