Rosneft calls off purchase of Morgan Stanley's oil trading arm
MOSCOW (Reuters) - Russia's top oil producer Rosneft said on Monday that a deal to acquire an oil trading business from Morgan Stanley has been terminated due to a refusal by regulators in the United States to clear it.
"Having invested substantial efforts in the deal, the parties regret that it could not be completed. Despite this, the parties continue to cooperate in other spheres," said Rosneft, in which BP owns almost 20 percent.
The termination of the deal is yet another blow for Rosneft after its partners, including ExxonMobil , withdrew from projects to develop Arctic offshore oil deposits following the introduction of Western sanctions over the Ukraine crisis.
The deal was initially agreed in December 2013. But since then the West has introduced numerous rounds of sanctions on Russia while the price of oil has plummeted by almost a half from a June peak.
Sources told Reuters in September that Rosneft might not go ahead with the deal because western sanctions had hurt its ability to finance the operations.
A key U.S. regulatory committee had asked the two parties for more information about the deal but in the end did not approve it.
Rosneft confirmed on Monday that the regulatory clearances had been refused.
(Reporting by Vladimir Soldatkin and Katya Golubkova, editing by Thomas Grove and Jane Merriman)
