BP is a London-based oil company with operations in more than 80 countries. The company is one of the biggest in the world, measured by 2011 revenues, and operates in all areas of the oil and gas sectors. In January 2013, a US judge accepted an agreement by BP to plead guilty for its role in the Deepwater Horizon disaster in which 11 workers died and pay a record US$4 billion in criminal penalties for the worst offshore oil spill in US history.
BP to sell half its Russian venture TNK-BP to Rosneft
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British oil giant BP said on Monday that it has agreed to sell its half of Russian venture TNK-BP to Rosneft for US$17.1 billion (13.1 billion euros) and another 12.84 per cent share in the state energy giant.
The deal creates a top player in the global oil sector with big implications for Arctic exploration and effectively ends the often tumultuous TNK-BP joint venture.
In Moscow, Rosneft announced it had also bought the other half-stake in TNK-BP from Russian investors.
BP added in a statement that it would spend US$4.8 billion of the proceeds to buy another 5.66 per cent of Rosneft from the Russian government, bringing its total stake in the Russian company to 19.75 per cent. BP currently owns 1.25 per cent of Rosneft.
Under the terms of the deal, BP would have two seats on Rosneft’s nine-person board.
“BP today announced that it has signed heads of terms to sell its 50 per cent share in TNK-BP to Rosneft, the major Russian integrated oil and gas company,” the statement added.
“Signing of the definitive agreements is conditional on the Russian government agreeing to the sale of the 5.66 per cent stake in Rosneft and it is intended that the TNK-BP sale and this further investment in Rosneft would complete on the same day.
“Therefore, on completion of the proposed transaction, BP would acquire a total 18.5 per cent stake in Rosneft and net US$12.3 billion in cash.
“This would result in BP holding 19.75 per cent of Rosneft stock, when aggregated with BP’s 1.25 per cent current holding in Rosneft.”
BP chief executive Bob Dudley said the deal “builds on BP’s track record of value creation in Russia. It is consistent with our strategy of deepening our positions in the world’s most prolific oil and gas regions.
“BP intends to be a long term investor in Rosneft -- an investment which I believe will deliver value for our shareholders over the next decade and beyond.”