The state-owned Russian company Rosneft has submitted a bid of $28 billion, including shares for 50% stake of British Petroleum in the Russian company TNK-BP. Following the transaction Rosneft would become the largest listed oil producer in the world. And this might be industry’s second-largest deal ever.
An agreement with BP would send Rosneft among the largest oil producers in the world, with about 3 million barrels per day compared to 2.3 million barrels for U.S. group Exxon, now the largest listed producer, according to Financial Times.
Rosneft bid submitted was Thursday before the deadline, said sources close to the situation for the British newspaper. General manager, Igor Sechin, is in London for talks.
The deal would enable BP to conclude partnership, often difficult, with a group of Russian billionaires, who own the remaining 50% stake in TNK-BP. It also would ensure future sales of BP in Russia for decades, writes the Financial Times. BP would get $15-20 billion and a 10-20% stake in Rosneft, said one source.
Igor Sechin is since Wednesday in London to finalize the details of the offer, and on Thursday discussed with several financial institutions to get the necessary funds. BP’s board will meet Friday to review the options.
BP has created TNK-BP in 2003, investing $8 billion in a group that combines assets of the British manufacturer with assets of Russian consortium Alfa-Access-Renova (AAR), controlled by a group of Russian oligarchs. The British company has received, over the years, dividends of $19 billion.
Rosneft could also take over the participation of AAR as the Russian billionaires are reluctant to remain in partnership with the state-owned producer. Rosneft and AAR signed on Tuesday a memorandum stating that the Russian company has agreed to take 50% stake in TNK-BP AAR for $28 billion.
AAR initially expressed interest in taking over BP stake in the joint venture, but did not submit a bid.
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