BP due to announce £17bn deal with Rosneft
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Your support makes all the difference.BP could unveil a $28bn (£17bn) deal with the Russian state-controlled oil group Rosneft as early as today.
The British oil major is expected to sell its half of Russia's third-largest oil company, TNK-BP, to Rosneft for between $25bn and $28bn. The deal will see BP take a stake of between 15 and 20 per cent in the Russian giant as well as up to $14bn in cash. BP and Rosneft are also expected to take seats on each other's boards.
The final details were still being negotiated over the weekend but an official announcement is expected sometime this week.
The tie-up will give BP access to the vast reserves in the Russian Arctic, which are estimated to hold more than 10 billion barrels of oil and nearly 3 trillion cubic metres of gas. It is expected to return some of the proceeds to investors as a special dividend.
Rosneft, meanwhile, will consolidate its position dominating the Russian oil industry. The group, headed by President Vladimir Putin's former chief of staff Igor Sechin, is also set to take over the 50 per cent in TNK-BP owned by four Russian oligarchs, giving it control of more than half the country's oil industry. It marks the latest in a series of steps by Russia to regain control of assets that were privatised in the 1990s, including the takeover of the oil firm Yukos in the mid 2000s, which was also overseen by Mr Sechin.
Rosneft is listed on the London Stock Exchange, but is majority-owned by the state. The takeover of TNK-BP will make it the world's largest oil company, producing more than 4 million barrels of oil a day – about 40 per cent of Saudi Arabia's daily output.
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