LONDON — British oil company BP confirmed Monday, Oct 22, it is in advanced talks about selling its stake in TNK-BP to Rosneft, Russia's state-controlled oil company.
It
was the first confirmation from BP that it was negotiating to sell its
50 percent stake in the TNK-BP joint venture to Rosneft. Though its
involvement in the joint venture been hugely lucrative, BP has had a
turbulent experience.
The expectation is that BP will likely take a stake in Rosneft, which is 75 percent owned by the Russian government, as part of a deal.
A
person familiar with the talks told The Associated Press on Sunday that
Rosneft would buy BP’s stake in TNK-BP for between $10 billion and $15
billion cash, plus a 15-20 percent share in Rosneft. The person spoke on
condition of anonymity.
BP shares opened 0.9 percent lower at 4.47 pounds.
Meanwhile, Russian Deputy Prime Minister Arkady Dvorkovich said Rosneft would get several licenses to develop new oil fields in the coming days.
Dvorkovich
told the Itar-TASS news agency on Monday that remaining formalities
would be settled in “the coming days, weeks at most,” he said.
Analysts
at Moscow-based investment bank Renaissance Capital said recently that
the BP-Rosneft deal “could have a domino effect on the Russian oil sector, as other players may try to respond to Rosneft’s move by acquiring other companies.”
The new wave of mergers and acquisitions could bring in a larger presence of international companies in Russia, they said.
Renaissance
said it expects Rosneft to eventually acquire full control of TNK-BP by
buying the 50 percent stake held by Alfa-Access-Renova, which is
controlled by four Russian billionaires.
Renaissance
said the deal would be profitable for Rosneft only if they “immediately
shift priorities from scale to efficiency,” and “import BP’s management
and technological expertise.”
