Rosneft to buy TNK-BP
October 23 , 2012
State-controlled Russian oil company Rosneft has signed a two-part deal worth some $55 billion to buy privately-owned TNK-BP.
The move will make British oil giant BP a near-20 percent shareholder in Rosneft, with two seats on the board.
The first part of the agreement announced by Rosneft on Monday folds BP's half of TNK-BP, Russia's third largest oil company, into Rosneft in exchange for cash and Rosneft stock.
The agreement is worth about $27 billion, made up of $12.3 billion of cash and the rest in stock.
In stage two, AAR, BP’s partners in the venture, will receive $28 billion in cash. The two deals are independent of each other and the AAR deal is still subject to negotiations.
The deal also enables BP to end a tumultuous relationship with AAR and seek closer ties to the Russian government, which exerts tight control over the oil industry.
With the whole of TNK-BP on board, Rosneft, which is already Russia's top oil producer, will control nearly half of the country’s oil output.
It will pump more oil and gas than Exxon Mobil, the world's biggest international oil company.