RATINGS RATIONALE

The change of outlook reflects Moody's view that a stable outlook is no longer reflective of the risks to TNK-BP's credit standing and financial policies from a potential share sale. The change of outlook also factors in changes in the company's governance that have taken place recently. As well as BP's recent announcement that it may exit the partnership, Moody's notes that persistent shareholder disputes at TNK-BP have already translated into changes in the company's top management structure and board of directors composition. In the rating agency's view, these developments represent a degree of corporate governance risk that may eventually negatively affect the company's financial profile. At the same time, Moody's recognises that the transaction should result in the resolution of a long-standing shareholder dispute at TNK-BP, and a more efficient shareholding structure.

Moody's notes that there is a high degree of uncertainty with regard to the timeline, size and composition of a transaction, if it were to go forward. Although the rating agency does not believe that this will have any immediate negative implications for TNK-BP's operational or financial metrics, the negative outlook reflects the possibility of a negative rating migration over the medium term following a change in the ownership structure, or as a result of a protracted shareholder conflict.

WHAT COULD CHANGE THE RATING UP/DOWN

Given the negative outlook on TNK-BP's ratings, Moody's does not currently expect positive rating pressure.

Moody's will take a decision on whether to stabilise the outlook or downgrade TNK-BP's ratings once the final parameters of the transaction are clear. The rating agency's assessment will focus on the following factors: (i) the sustainability of the new shareholder structure, given that this 50/50 joint venture has a history of troubled corporate governance; (ii) the new shareholders' joint capability to provide a similar level of technical efficiency and reserves management that TNK-BP currently enjoys; (iii) the potential effect of the transaction on the company's financial policies, particularly the scale of its shareholder distributions and leverage; (iv) any change in TNK-BP's scale of operations as a result of the transaction; and (v) the overall shareholder strategy for the asset.

In addition, a downgrade of the ratings could result from severe delays in the resolution of the current situation, or from any escalation in the severity of the disputes between the two shareholder groups.

PRINICIPAL METHODOLOGY

The principal methodology used in rating TNK-BP was Moody's "Global Integrated Oil & Gas" Industry methodology, published in November 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

TNK-BP International Ltd, jointly owned by BP Plc (BP, A2 stable) and AAR, a consortium of Russian shareholders (Alfa Group, Access, Renova), operates the third-largest oil company in Russia in terms of production and reserves. The company's total proved hydrocarbon reserves under SEC-LOF standards as of 31 December 2011 amounted to 9.1 billion barrels of oil equivalent (boe). In the FY 2011, the company reported USD60.2 billion in revenue and USD14.6 billion in EBITDA, and distributed USD7.5 billion in dividends.

REGULATORY DISCLOSURES

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Julia Pribytkova Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Service Limited, Russian Branch 7th floor, Four Winds Plaza21 1st Tverskaya-Yamskaya St.Moscow 125047 RussiaDavid G. Staples MD - Corporate Finance Corporate Finance Group Telephone: 00971 4237 9536 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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