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Rosneft agrees with BP to buy TNK-BP full stock

October 22, 2012, 15:45 UTC+3

Rosneft CEO Igor Sechin also noted that BP approved Rosneft’s buyout of a stake, which the consortium AAR had in TNK-BP

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 NOVO-OGAREVO, October 22 (Itar-Tass) —— The Russian state-run oil giant Rosneft agreed with the British oil corporation British Petroleum (BP) to buy the TNK-BP full stock, Rosneft CEO Igor Sechin told Russian President Vladimir Putin here on Monday.

“Today the agreement over the principles of the purchase of the BP stake in TNK-BP by Rosneft was signed,” he said. Sechin also noted that BP approved Rosneft’s buyout of a stake, which the consortium AAR had in TNK-BP.

According to the Rosneft CEO, the price of the Rosneft shares for the deal with BP has made eight U.S. dollars for a share.

“For the effectuating of the deal (with BP) we proposed to take into account for calculations a Rosneft stake of 12.85% that will be handed over to BP,” Sechin noted. “So, BP will consolidate over 19% of Rosneft’s stock,” he noted.

The Rosneft CEO noted that this deal will also allow resolving the task to reduce the Russian state stake in the company. “Thus, the Russian governmental plans to reduce the state stake will be taken into account as well,” he remarked.

The Financial Times newspaper reported earlier on Monday that the deal for Rosneft’s purchase of 50% of stock in the Russian-British company TNK-BP from the energy group BP can be considered valid. Meanwhile, the newspaper noted the Russian state-run company is to approve officially the deal.

The newspaper affirmed that the BP board of directors approved the deal to the tune of 27 billion U.S. dollars with Rosneft. The top management of the Russian-British joint venture approved resolutely the agreement on the negotiated conditions. The deal envisages a complex offer of the transactions with cash and shares of the Russian state-run oil company. BP will receive about 11-13 billion dollars with in cash and a stake of more than 19% in Rosneft. The market cost of the Russian oil company makes about 73.4 billion U.S. dollars, thus the offered stake costs no less than 13.9 billion U.S. dollars.

The overall cost of the deal can be estimated at 25-27 billion U.S. dollars. BP is expected to receive from one to two seats in the Rosneft board of directors on the conditions of the agreement. Meanwhile, it is not ruled out that the sale of the BP stake in TNK-BP will allow the BP investors to count on a major payment through special dividends.

According to reliable sources of the Financial Times newspaper, the final terms of the BP-Rosneft deal can be made public in November.

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