• eng
19:31 GMT +3 hours19 December 2014
Live
Business

Rosneft Closes TNK-BP Deal to Become World’s Top Oil Producer

Business
000
Russia’s state-owned Rosneft put the final touches to its takeover of TNK-BP on Thursday to become the world’s largest publicly traded oil company.

MOSCOW, March 21 (RIA Novosti) – Russia’s state-owned Rosneft put the final touches to its takeover of TNK-BP on Thursday to become the world’s largest publicly traded oil company.

The deal for the purchase of TNK-BP from Britain’s BP and the AAR consortium of Russian billionaire shareholders places Rosneft ahead of Exxon Mobil and Royal Dutch Shell in terms of crude production.

“Rosneft and BP today completed a number of transactions, in line with the terms announced in October 2012,” Rosneft said in a statement.

BP is receiving a net payment of $12.5 billion in cash, including a TNK-BP dividend of $0.7 billion and an 18.5 percent stake in Rosneft. Rosneft is getting BP’s 50 percent interest in TNK-BP in exchange for $16.7 billion in cash and 12.8 per cent of Rosneft shares.

In a separate part of the deal, Rosneft paid $27.7 billion in cash to the AAR consortium of Russian billionaire shareholders for their half of TNK-BP.

BP head Robert Dudley said the finalization of the deal marked a historic turning point for BP in Russia.

“We hope to help Rosneft to deliver synergies through its acquisition of TNK-BP and to grow production and reserves through brownfield, greenfield and unconventional opportunities,” he said.

BP has added to existing holdings and now controls a 19.75 percent stake in the Russian oil giant.

President Vladimir Putin said he welcomed BP’s increased role in Rosneft as a desirable direction for the privatization of state assets.

“This is the acquisition of a strategic partner in a new quality and I hope this will bring new technologies and new projects,” Putin said at a meeting with the heads of Rosneft and BP.

This deal grants BP a more secure position in Russia’s energy landscape, giving access to the sprawling nation’s oil-rich Arctic region and will raise the cash it needs to finance outstanding compensation for the 2010 Gulf of Mexico spill from its Deepwater Horizon rig.

It also spells an end to the British major’s fractious arrangement with its TNK-BP partners at AAR.

Rosneft chief executive Igor Sechin says his company is set to produce 206 million tons of oil and 47 billion cubic meters of gas in 2013.

He announced late last year that Rosneft would, once its acquisition of TNK-BP had gone through, account for 5 percent of global oil output.

“Oil production will rise from 2.4 million barrels per day to 4.1 million bpd and overall output (of hydrocarbons) will grow to 4.6 million barrels (of oil equivalent) per day from the current 2.6 million bpd,” Sechin said at the time.

 

Tags:
BP, TNK-BP, Igor Sechin, Vladimir Putin