Russia's largest oil company, Rosneft, has agreed to start talks with Britain's BP to purchase its stake in TNK-BP, Rosneft said on Tuesday.
BP currently holds a 50 percent stake in the venture, along with AAR, a group of four Russian partners. BP said last week it wanted to sell its stake, worth billions of dollars.
"As a result, the two sides have agreed to start talks over this question and have signed a confidentiality agreement," Rosneft said in a statement. "Rosneft was informed that TNK-BP's shareholders are also interested in acquiring all or part of BP's stake in TNK-BP, so, as per the shareholder agreement, BP is bound to start talks with them. Rosneft considers that acquisition of BP's stake would be in the interests of BP shareholders and the further development of Rosneft."
Rosneft expects a "considerable synergy effect" in geological prospecting and oil production in Eastern Siberia, development of the company's gas sector and better oil and oil products logistics from the possible purchase of the stake in TNK-BP, Russian oil giant said in a statement.
“There can be no assurance that Rosneft and BP will enter into any transaction involving TNK-BP,” Rosneft said.
Britain's BP confirmed on Tuesday it had started talks with Russia's Rosneft over sale of its stake in TNK-BP.
"Today BP confirms it has started talks with Rosneft over the possible sale of BP's stake in TNK-BP," the company said.
BP also confirmed it would undertake parallel talks with AAR in accordance with their shareholder agreement.
AAR informed BP last week that it would like to increase its stake in TNK-BP. AAR earlier said it was ready to purchase half of BP’s 50 percent stake in the venture. The talks are due to be concluded by late October.
BP and AAR have been locked in a long-running dispute over management of their Russian joint venture, which resulted in the replacement of the former TNK-BP CEO Robert Dudley in 2008.
Russian billionaire Mikhail Fridman, one of the AAR partners, resigned as TNK-BP's CEO in late May due to what he called a collapse of corporate management.
Analysts polled by RIA Novosti last week said Russian-state-owned companies, specifically oil major Rosneft, would be the most likely candidates to purchase BP’s stake, if the British oil major failed to agree a deal with the AAR consortium.
Fridman said at the end of June that while the question of what the stake in TNK-BP had not been discussed with BP, it should be in line with the company’s current market worth.
He said a figure of $65 billion which had been mentioned last year was no longer relevant, and he could not see anyone buying it for the $25-30 billion which analysts said BP’s stake was worth.
Earlier this month the Guardian reported Fridman said AAR could offer BP just $7 billion, as it would want $13 billion less than the $20 billion it was now worth in order to drop compensation claims for damage suffered earlier this year as a result of a failed tie-up bid by BP with Rosneft.
A successful deal by Rosneft to acquire BP's stake in TNK-BP will boost the Russian state oil company’s capitalization, Energy Minister Alexander Novak said on Tuesday.
“From the viewpoint of the state company’s capitalization, this is good news. This means an expansion of the area of its business, higher capitalization but in general I believe that foreign companies should continue to have stakes on the [Russian] market and should continue coming to Russia,” Novak said.
In 2011, parent company TNK-BP International’s US GAAP net profit rose 54 percent to $8.981 billion. Production rose 1.8 percent to 84,396 million tons of crude.
In the spring of 2011, BP offered the Russian shareholders of TNK-BP $27 billion to repurchase their stake, an offer that was rejected.