Russia’s state giant Rosneft has struck a deal to buy the country’s third largest oil producer to become the world’s biggest public oil company.
Under a deal worth $61 billion, announced on Monday in Moscow and London, Rosneft will acquire from British Petroleum its 50 per cent stake in TNK-BP, and will buy the other half of the joint venture from the AAR consortium of Russian billionaires.
BP said it would get $17.1 billion in cash and a 12.84 per cent stake in Rosneft. This will make BP the second-biggest shareholder in Rosneft after the Russian state, which owns 75 per cent of the company.
Rosneft chief Igor Sechin said his company would buy the other 50 per cent of TNK-BP from the Russian consortium for $28 billion.
President Vladimir Putin gave a public blessing to the deal. “It sends a very good signal for the Russian and international energy market,” Mr. Putin said at a meeting with Mr. Sechin on Monday.
“It is a good, large deal that is necessary, not only for the Russian energy sector but also the entire economy.”
The acquisition of TNK-BP will give Rosneft control over half of Russia's energy sector, and make it the world's largest publicly-traded oil company and second in size only to Saudi Arabia's Aramco.
Russia already accounts for a quarter of BP’s oil production, and the tie-up with Rosneft would give BP broader access to Russia’s vast energy resources, while Rosneft would be able to benefit from BP’s expertise in exploring in difficult conditions, such as the Arctic Ocean.
