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AAR consider investing proceeds from TNK-BP sale in Russian oil sector

President Vladimir Putin earlier expressed hope that the AAR owners would invest their proceeds from the sale of TNK-BP in the Russian economy
Photo EPA/ITAR-TASS
Photo EPA/ITAR-TASS

MOSCOW, December 24 (Itar-Tass) —— The consortium of Alfa Group, Access Industries and Renova (AAR) is considering investing proceeds from the sale of TNK-BP in the Russian oil industry.

“AAR is just considering [it], we are discussing [it][, but no decisions have been made yet. These are just investments. We have good experience and serious competences,” entrepreneur Viktor Vekselberg said on Monday, December 24.

He also said that Renova has a large portfolio of assets. “We will develop focusing mainly on high technology,” Vekselberg said.

He mentioned in particular the construction of a medical preparations plant, as well as energy and machine-building projects.

President Vladimir Putin earlier expressed hope that the AAR owners would invest their proceeds from the sale of TNK-BP in the Russian economy.

The consortium is selling its 50 percent stake in TNK-BP to the state-owned oil company Rosneft for 28 billion U.S. dollars.

Rosneft and AAR earlier signed a sale and purchase agreement for the 50 percent stake in TNK-BP. The transaction price is set on the basis of the valuation of AAR’s TNK-BP stake at 28 billion U.S. dollars. Completion of the deal is expected in the first half of 2013 after receiving approvals from Russian and EU antimonopoly regulators.

Commenting on this agreement, Rosneft President Igor Sechin said: “We consider the acquisition of TNK-BP to be strategically attractive for the shareholders of Rosneft. The agreements signed today enable Rosneft to fully consolidate the business it is acquiring and realize significant synergies. The agreements reached put us in the position to immediately begin preparing the integration process.”

Viktor Vekselberg, Chairman of the Board of Directors of Renova Group, said: “Through this transaction, Rosneft acquires not only high-quality oil and gas assets, but also a unique corporate culture and operating experience accumulated by TNK-BP during the decade of the existence of our joint venture. These will no doubt help the transformation of Russia's largest oil company into a global leader.”

TNK-BP Executive Director and member of the Board of Alfa Group German Khan said:”"A deal of this scale has never been done in Russia. The very fact that it is taking place attests to the growing potential of Russia's economy, and reflects Russia’s leading role in the global oil and gas industry.”

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 finalisation of a share purchase agreement and other customary closing conditions.

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.