China's Sinopec Group had agreed to pay for a huge stake in Volga-region oil producer Udmurtneft [RTS: UDMN] will only be disclosed when the deal is signed.
Chief executive Robert Dudley said TNK-BP and China Petroleum & Chemical Corporation, which is part of the Sinopec Group, had exchanged commercial terms of the deal, but had not signed it so far.
As long as the deal is not signed, the price will be considered a commercial secret, he said.
TNK-BP said June 20 it had agreed to sell 96.7% in Udmurtneft, yielding 8% of its oil output, to Sinopec, which won a tender earlier in the day.
Russia's state-owned oil company Rosneft will then acquire a 51% stake in the oil producer from Sinopec. The latter will finance the deal, which the Russian oil company will repay from the new asset's earnings. In May, Rosneft concluded an option deal with Sinopec to buy 51% in Udmurtneft if Sinopec won the tender, Rosneft said in a news release.
Udmurtneft accounts for more than 60% of the Russian republic of Udmurtia's oil output. Last year, the company produced 5.98 million metric tons (43.6 million barrels) of crude with a daily output of 16,400 metric tons (115,000 barrels). The company's proven reserves as of December 31, 2005 were 78.4 million metric tons of oil (551 million barrels), and forecast reserves stood at 131 million metric tons (922 million barrels).
Dudley said the concern would channel the money into development, including investment projects.
