NEW YORK ( TheStreet) -- BP (BP - Get Report) and Apache (APA - Get Report) were in the news a year ago when Apache inked a deal to buy a block of assets from BP, and both were back in the news on Tuesday for M&A reasons, although moving in different directions.
BP finally came out and said what the market has already expected, that its deal with Russia's Rosneft to develop Arctic assets is going nowhere fast. Apache, meanwhile, said on Tuesday that it was increasing its capital spending budget in 2011 from $7.5 billion to $8.1 billion, at least partially to exploit opportunities in the U.S. Permian Basin and in Canada, areas where it acquired assets from BP in July 2010.
BP CEO Robert Dudley stopped short of saying "never" in the Tuesday announcement that the Russian Arctic deal had failed -- in fact, it was just the legal deadline to reach a deal that had passed -- though BP's last-ditch effort to save the deal was shot down by Rosneft and rumors are rampant that Rosneft is looking elsewhere.
Dudley said in the release, "BP remains committed to Russia, to working constructively with AAR in TNK-BP and to our existing good relationship with Rosneft. All parties have worked hard to reach an acceptable resolution, as we believe it could offer significant benefits to BP shareholders, to Rosneft, AAR and Russia."Phil Weiss, analyst at Argus Research, said on Tuesday that the offer BP and TNK-BP -- its Russian natural gas partner -- made to Rosneft for TNK-BP to take over the Arctic deal never made much sense, since BP is the company with the drilling expertise, and TNK-BP, on the other hand, has no experience in oil drilling. "It didn't seem to me they would come to terms unless they could buy out AAR