BP Oil Deal
BP Agrees on Terms of Rosneft Deal: Oil Company Sells TNK–BP Shares to Russian Giant
BP’s group chief executive Bob Dudley said: “This investment 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.”
“Rosneft is a company working to become a global leader in the sector. It is developing its substantial asset base with new technologies and improving its management processes and corporate governance. As a major investor BP looks forward to being able to contribute to Rosneft’s success and add value through our participation on the Board. In this regard BP is supportive of Rosneft’s intention to pursue further equity in TNK-BP in due course.”
Terms and Details of Deal Between BP and State–Owned Rosneft Revealed
In accordance with the heads of terms, BP and Rosneft have an exclusivity period of 90 days to negotiate fully-termed sale and purchase agreements. After signing definitive agreements, completion would be subject to certain customary closing conditions, including governmental, regulatory and anti-trust approvals, and is currently anticipated to occur during the first half of 2013. In addition, BP will agree not to dispose of any of the Rosneft shares acquired in the transaction for at least 360 days following the completion of the transaction.
Transaction Follows Cooperation of the Two Oil Giants
BP has a long relationship with Rosneft including an alliance that started in 1998 to explore the Russian continental shelf offshore Sakhalin. Rosneft and BP are 50/50 owners of the 530,000 barrels a day German refining joint venture Ruhr Oel.
Rosneft’s proved oil reserve replacement ratio was 127 per cent in 2011. The company has recently begun a programme to develop its substantial tight oil reserves, estimated at 5.8 billion barrels, as well as exploring and developing offshore oilfields in the Arctic. – More on page 3!