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BP has also offered to purchase an additional 600m Rosneft shares for US$4.8bn
22/10/2012
Rosneft to buy TNK-BP
Agrees deals with joint venture partners BP and AAR
Helen Tunnicliffe
ROSNEFT is to buy both BP’s and Alfa Access Renova’s (AAR’s) stakes in their 50:50 Russian joint venture TNK-BP.
The news comes after months of speculation about TNK-BP after relations between the two parties reportedly broke down. Various news outlets on Friday reported sources who claimed that Rosneft would pay US$28bn for each half of TNK-BP, however, only AAR received that figure. The AAR offer is a cash offer. Under the heads of terms signed today, BP will receive US$17.1bn and a 12.84% stake in Rosneft for its stake.
BP has also offered to purchase an additional 600m shares, a 5.66% stake in Rosneft, for US$8/share, a total of US$4.8bn. This is a premium of 12% on Rosneft’s share closing price on 18 October. Rosneft has until 3 December to accept this offer. BP already has 1.25% of Rosneft’s shares, and by purchasing the additional stake, it will have a total of 19.75%, giving it two seats on the Rosneft board.
Rosneft says the acquisition gives various cost-saving opportunities, including for upstream development projects and product supply logistics.
“Rosneft would welcome BP as a significant investor in the company, and I strongly believe that we would benefit from BP’s experience and its track-record of implementing best international practices in Russia. I am especially pleased that BP has chosen to remain as one of the largest foreign investors in the Russian economy recognising the potential of both Rosneft and the Russian oil and gas sector,” says Rosneft president Igor Sechin.
BP CEO Bob Dudley says that the holding in Rosneft will give significant returns to BP and strengthen the company’s relationship with Russia. He adds that BP intends to be a long-term investor in Rosneft and supports its plan to “acquire additional equity stakes from other shareholders in TNK-BP.”
“This investment builds on BP’s track record of value creation in Russia. It is consistent with our strategy of deepening our positions in the world’s most prolific oil and gas regions,” says Dudley.
Subject to governmental and regulatory approval, Rosneft expects the deals to be completed during the first half of 2013. The deal with AAR is dependent on the successful conclusion of the deal with BP.
