Russian state-owned oil giant Rosneft strengthened its hold on the country's lucrative oil industry when it sealed a $61-billion deal, buying TNK-BP, the joint venture between a group of Russian oil oligarchs and a British oil giant.
BP, the British energy company that has been widely criticized for its handling of a disastrous 2010 oil spill in the Gulf of Mexico, agreed to sell its 50 per cent stake in TNKBP to Rosneft for $17.1 billion in cash and a 12.84 per cent stake in the Russian oil group.
In Moscow, Rosneft said it had also agreed to buy the other 50 per cent in the joint venture from AAR for $28 billion. Rosneft said the deal with AAR is "entirely independent of the transaction with BP." The Russian oil group said it would finance the deal with its own cash as well as new borrowings.
Rosneft CEO Igor Sechin broke the news about the deal to President Vladimir Putin, telling him that the deal would be worth about $61 billion. "This is a good big deal which is important not only for Russia's energy sector but for the entire Russian economy," Putin said in remarks carried by Russian television.
Rosneft shares jumped more than three per cent on the announcement but rolled back to their morning level of 215 rubles per share, or up 1.2 per cent.
BP shares were down 0.3 per cent to 449 pence following the announcement. BP said that it would use some of the money from its deal to raise its stake in Rosneft to 19.75 per cent.
Russia is an important part of BP's business, accounting for a quarter of its oil production. BP chief executive Bob Dudley has looked to the country's vast oil resources as a key ingredient to the company's recovery from the Deep Horizon oil spill in the Gulf of Mexico.
