BP to sell TNK-BP stake to Rosneft in $17 billion deal

BP PLC is selling its half-interest in TNK-BP to Rosneft in a transaction that will expand its stake in the buyer, an ill-fated deal with which has soured the UK company’s relations with its TNK-BP partner since early last year.

Under heads of terms announced Oct. 22, Rosneft will pay $17.1 billion in cash and shares representing a 12.84% interest for BP’s 50% interest in TNK-BP. BP said it will buy a 5.66% stake in Rosneft for $4.8 billion cash from the Russian government, raising its ownership of the Russian company, including a small existing interest, to 19.75%.

BP said it expects its net cash receipt from the deals to be $12.3 billion. If the transaction is completed, BP expects to have two seats on Rosneft’s nine-member board.

It had informed Alfa Access Renova (AAR), its 50% partner in TNK-BP, in June that it was considering a sale of part or all of its interest. AAR responded by saying the parity ownership structure in TNK-BP was “inoperable” (OGJ Online, July 19, 2012).

AAR had blocked an $8 billion deal between BP and Rosneft announced in January 2011 for joint exploration in the Arctic and other collaboration, calling it a breach of the TNK-BP shareholders’ agreement (OGJ Online, Mar. 25, 2011).

Rosneft later signed a strategic cooperation agreement with ExxonMobil covering much of the same work (OGJ Online, June 15, 2012).

TNK-BP, which produced an average 1.987 million boe/d of oil and gas in 2011, earned $4.1 billion for BP last year. BP’s consolidated balance sheet in June valued the TNK-BP share at $10.715 billion.

Rosneft’s average production last year was 2.45 million b/d of oil. The company’s proved developed reserves totaled 9.96 billion boe of oil and gas, and its proved undeveloped reserves totaled 8.39 billion boe.

Rosneft reported 2011 net income of $10.8 billion.

BP and Rosneft have worked together since 1998 to explore offshore Sakhalin Island and are 50-50 owners of the joint venture Ruhr Oel GMBH, which holds interests in 530,000 b/d of refining capacity in Germany.

Related Articles

Market watch: Energy futures prices rose slightly Friday

05/06/2002 Crude oil futures prices rose slightly Friday amid lingering uncertainty about a possible disruption of Middle East supplies, although tensions in ...

Gulf of Mexico oil service sector showing signs of an upturn

05/06/2002 The Gulf of Mexico oil service sector is experiencing the signs of an upturn, analysts with Simmons & Co. International, UBS Warburg LLC, and RBC D...

OTC: Industry, national agencies need to work together to make FPSOs work in the gulf

05/06/2002 Over the coming years, the oil and gas industry will have to keep an open line of communication with national agencies such as the US Coast Guard a...

Market watch: Energy futures prices fall as Iraq lifts embargo

05/07/2002 Crude oil futures prices fell Monday after Iraq announced plans to lift a self-imposed export embargo with exports expected to resume by Wednesday.

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected