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Russia approves Rosneft’s purchase of TNK-BP

22 November 2012 17:35 (UTC+04:00)
Russia approves Rosneft’s purchase of TNK-BP

The Russian government has given its approval for state-controlled oil giant Rosneft to buy 100 percent of TNK-BP from British oil major BP and the AAR consortium of Russian billionaire shareholders, Deputy Prime Minister Arkady Dvorkovich said on Thursday, RIA Novosti news agency reported.

"All the directives related to these deals have been approved by the government," Dvorkovich said.

Under the terms of the deals announced in October, BP will receive $17.1 billion in cash for its 50 percent stake plus stock representing 12.84 percent of Rosneft's shares, while the AAR consortium of Soviet-born billionaire shareholders will sell its 50 percent stake in the joint venture "for cash consideration of $28 billion."

Rosneft's deal for an all-out purchase of TNK-BP would make it the world's largest publicly traded oil company, with higher crude production than global energy titans Exxon Mobil and Royal Dutch Shell.

Rosneft may take out loans from Western banks, sell non-core assets and bond issues to finance the purchase of TNK-BP, Rosneft CEO Igor Sechin said earlier this year.

Rosneft may consolidate 100 percent of TNK-BP's shares within six months and the deal will allow the oil producer to boost annual crude production to 200 million metric tons (4 million barrels per day).

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