Rosneft to buy TNK-BP stake from BP, AAR in $54.7-bn deal

OAO Rosneft today struck a landmark $54.7-billion deal to acquire TNK-BP from the equal joint venture partners' British oil giant BP and AAR consortium controlled by Russian oligarchs, a transaction that will catapult the Russian state-owned oil giant to become the world's largest listed oil producer.

Under the terms of the largest ever deal in the oil industry, Rosneft will pay the AAR consortium $28 billion in cash for its 50 per cent stake in TNK-BP, and pay BP $27 billion in a cash and stock deal - $17 billion in cash for its 50-per cent and give 12.84 per cent of Rosneft shares valued at $9.7 billion.

London-based BP, which already holds a 1.25 per cent stake in Rosneft, will buy an additional 5.66 per cent, from the Russian government for $4.8 billion, taking its total holding in the Moscow-based company to 19.75 per cent and become the second-largest shareholder after the Russian state.

Russia's President Vladimir Putin described the transaction as a "good deal at a good price."

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.

The proposed acquisition will make Rosneft the world's largest listed oil company, surpassing US giant ExxonMobil with a production capacity of nearly 4.5 million barrels of oil equivalent per day.