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Ministry to present its position on Rosneft’s purchase of TNK-BP shortly

November 05, 2012, 20:00 UTC+3
Rosneft CEO Igor Sechin visited London on late October for talks with BP on a possible purchase of its share in TNK-BP
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Photo EPA/ITAR-TASS

Photo EPA/ITAR-TASS

VIENTIANE, November 5 (Itar-Tass) —— The Ministry of Economic Development will present its position on the purchase of TNK-BP by Rosneft shortly, Deputy Prime Minister Arkady Dvorkovich said on Monday, November 5.

“The documents are in the Ministry of Economic Development now. The ministry will present its position shortly in accordance with the instructions with the chairman of the government that were issued pursuant to the president’s order,” he said.

Dvorkovich noted that the position would be presented within the next several days.

Rosneft CEO Igor Sechin visited London on late October for talks with BP on a possible purchase of its share in TNK-BP.

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.

The British television company Sky News said, citing its own sources, that the AAR consortium had also 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.

“AAR said ... 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,” Bloomberg reported.

It became known later that AAR confirmed it had signed Heads of Terms (Memorandum of Understanding) to sell its 50 percent interest in TNK-BP Ltd. to Rosneft for an aggregate price of 28 billion U.S. dollars in cash.

BP has provided a waiver of its right to hold good faith negotiations with AAR over a 90-day period as stipulated by the TNK-BP Shareholder Agreement. The transaction is subject to finalization of a share purchase agreement and other customary closing conditions.

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