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BP discusses Rosneft's request for purchase of share in TNK-BP

October 20, 2012, 19:03 UTC+3

The overall cost of the deal is estimated at 26-28 billion U.S. dollars

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LONDON, October 20 (Itar-Tass) —— The BP Board of Directors met in London on Friday to discuss the Russian state-owned oil major Rosneft’s offer to buy the British company’s share in TNK-BP.

The Guardian said an official agreement would be available early next week.

BP said it would not make any statements until all details were clarified and worked out.

“The initial board meeting went well,” one insider said. “But don’t assume it will be announced by Monday. First we need to ensure all the details of the deal have been worked through.”

BP said: “If and when BP reaches any agreement, it will make an announcement.”

According to the Financial Times, Rosneft offered 15-20 billion U.S. dollars in cash for BP’s 50 percent share in TNK-BP, plus a 10-20 percent stake in Rosneft. This will allow BP to get a seat on Rosneft’s Board of Directors.

The overall cost of the deal is estimated at 26-28 billion U.S. dollars.

The purchase of the BP stake by Rosneft will make it the biggest publicly listed oil company in the world if it also buys the other 50 percent of TNK-BP from a consortium of local oligarchs known as AAR for a reported 28 billion U.S. dollars.

But the Russian government said Rosneft has not asked it so far to approve its possible purchase of AAR’s share in TNK-BP.

“There has been no request for approval so far,” Deputy Prime Minister Arkady Dvorkovich said earlier this week. “I know that commercial negotiations are underway. As far as know, a letter of intent has been signed. But there is no legally binding agreement.”

He stressed that the deal would require the approval of the government.

The British television company Sky News said earlier in the day, citing its own sources, that the AAR consortium had signed a preliminary agreement with Rosneft to sell its share in TNK-BP to the state-owned oil major for 28 billion U.S. dollars.

The AAR consortium, made up of private Russian shareholders of TNK-BP, and BP own 50 percent of shares in TNK-BP.

Officially neither AAR nor Rosneft have so far announced any preliminary agreement. When asked by Itar-Tass, BP officials refused to comment on the Sky News report. All attempts to get in touch with AAR officials proved futile – the consortium’s press service did not answer the telephone.

“AAR said last week it may sell its stake in TNK-BP to a third party or in an initial public offering if BP chooses Rosneft as the buyer. The TNK partners have signed a non-binding agreement to sell their stake to Rosneft, Deputy Prime Minister Arkady Dvorkovich said yesterday. AAR declined to comment,” Bloomberg said.

Rosneft Chief Executive Officer Igor Sechin visited London this week to hold talks with BP about their deal.

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