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Rosneft to acquire AAR and BP shares to gain TNK-BP control

BY JAMES MARSON

MOSCOW -- The oil giant Rosneft has agreed heads of terms to acquire the AAR consortium’s 50% stake in TNK-BP for $28 billion in cash, the company said in a statement. Rosneft also confirmed it had agreed to buy BP 50% stake in TNK-BP for $17.1 billion and 12.8% Rosneft shares.

Rosneft said the deal to buy out AAR, a group of Soviet born billionaires, is subject to the negotiation of definitive agreements, corporate and regulatory approvals and certain other conditions.

The acquisitions will make Rosneft the largest publicly traded oil producer in the world, with over 4 Mbopd of crude output.

Rosneft' s proved reserves will grow to 38.3 million boepd from 23.3 million if it acquires 100% of TNK-BP, the company said. Total hydrocarbon production would rise to 4.6 billion boepd.

Rosneft' s acquisition of a strategic stake in TNK-BP would be a major step in expanding the core business of Rosneft and would be a value-creating investment for our shareholders given the significant production growth and synergy potential, Igor Sechin said in the statement.

BP will use some of the cash it receives to increase its share in Rosneft to 19.8% and will be given two seats on the board.

Rosneft welcomes BP as a significant strategic investor in the company, which will be involved in forming the future strategic direction of the company through its representation on the board of Rosneft, Rosneft said in its statement.

Rosneft would welcome BP as a significant investor in the company, and I strongly believe that we would benefit from BP' s experience and its track record of implementing best international practices in Russia. I am especially pleased that BP has chosen to remain as one of the largest foreign investors in the Russian economy recognizing the potential of both Rosneft and the Russian oil and gas sector, Mr. Sechin said.

Dow Jones Newswires

10/22/2012

 

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