MOSCOW, March 22 (RIA Novosti) – British oil major BP announced on Friday it will buy back $8 billion in shares following the sale of its 50 percent stake in TNK-BP to Russia’s state-owned Rosneft oil company.
The sale of the TNK-BP stake completed on Thursday netted the British company $12.5 billion, including a TNK-BP dividend of $0.7 billion and an 18.5 percent stake in Rosneft.
BP said in a statement that the buyback program is expected to return to BP shareholders an amount equivalent to the company’s investment in TNK-BP, as the company invested around $8 billion in cash, shares and assets in the formation of joint venture in 2003.
“This buy-back program should … allow our shareholders to see benefits in the near-term from the value we have realized by reshaping our Russian business,” BP chairman Carl-Henric Svanberg said in the statement.
The buyback is expected to take between 12 and 18 months to complete.
The TNK-BP deal grants BP a more secure position in Russia’s energy landscape, giving it access to the sprawling nation’s oil-rich Arctic region and will raise the cash it needs to finance compensation for the 2010 Gulf of Mexico spill from its Deepwater Horizon rig.
The company said it intends to retain the additional cash consideration of $4.5 billion received from the sale of its interest in TNK-BP to reduce BP Group debt.