THE BOARD of BP has approved a $27 billion (€20.7 billion) deal with the Russian state oil company Rosneft to sell its stake in TNK-BP, which should seal the UK energy group’s future in Russia for decades to come.
The deal means BP will swap its troublesome partnership with a group of Russian oligarchs for an alliance with one of Russia’s most powerful companies – the Kremlin-backed national energy champion.
The board gave BP’s executive team “strong support” to reach a deal that would see the UK group sell Rosneft its 50 per cent stake in TNK-BP for a mixture of cash and shares, according to a person familiar with the matter.
The transaction would mark the end of a joint venture that has been lucrative for BP but proved to be a massive headache for the company. Its frequent run-ins with its partners, a consortium of Soviet-born billionaires known as Alfa-Access-Renova, grabbed headlines, alarmed investors and dragged down BP’s share price.
BP will receive $11 billion-$13 billion in cash and between 15 and 20 per cent in Rosneft. – (Copyright The Financial Times Ltd 2012)
