(BP, 20.Mar.2013) — Rosneft and BP completed a number of transactions, in line with the terms announced in October 2012. As a result of the transactions:
- BP receives net $12.48bn in cash, including a TNK-BP dividend of $0.71bn, and 18.5% Rosneft shares;
- Rosneft becomes holder of BP’s 50% interest in TNK-BP in exchange for $16.65bn in cash and 12.84% of Rosneft shares;
- OFSC ROSNEFTEGAZ sells 5.66% in Rosneft to BP in return for $4.87 billion in cash;
Robert Dudley joined the steering committee on TNK-BP integration chaired by Igor Sechin and has been nominated to the Rosneft Board of Directors.
In October 2012 BP and Rosneft announced agreement in principle for the sale and purchase of BP’s 50% interest in TNK-BP for $17.12bn in cash and 12.84% of Rosneft shares.
Following adjustments in accordance with the terms of the agreement excluding a $0.71bn dividend received by BP in December 2012 from TNK-BP, Rosneft has today paid BP a final amount of $16.65bn.
BP has used $4.87bn of the cash consideration to acquire 5.66% of Rosneft shares from ROSNEFTEGAZ. This amount includes the adjustment from the offer date to completion according to the terms of the purchase agreement.
As a result of these transactions BP has received $12.48bn net in cash (including the $0.71bn dividend received in December 2012) and, together with its existing 1.25% shareholding in the company, now holds a 19.75% stake in Rosneft, Russia’s largest oil company.
Commenting on the BP transaction, Rosneft President and Chairman of the Management Board Igor Sechin said: “We are delighted to close this transaction ahead of schedule and would like to thank our partners in BP for their cooperation throughout the process. We welcome BP as a strategic investor in Rosneft and look forward to their involvement in forming the future strategic direction of the company through its representation on the Rosneft Board of Directors.
“We are closing the deal of acquiring BP’s share in TNK-BP earlier than we previously planned and we want to thank our partners from BP for their cooperation throughout the process. We welcome BP as the major shareholder of Rosneft, which will take part in shaping the Company’s strategy though its participation in the Board of Directors.
“We hope that BP’s vast experience will allow us to maximize synergetic effect on several directions during the process of integration. This deal is a part of the current Rosneft strategy aimed at developing cooperation with the world biggest companies. We are sure that a transition to a new level of our relations will bring benefits not only to Rosneft and its shareholders, but also to Russian oil industry in general.
“We are glad that BP has made a decision to remain one of the biggest investors in the Russian economy, thus admitting vast prospects of Russia’s oil and gas industry and Rosneft’s big potential.”
BP Group Chief Executive Robert Dudley said: “This is a historic day for BP in Russia. BP has invested in Russia for more than 20 years and for a decade we have been Russia’s largest foreign investor through our involvement with TNK-BP. We aim to continue that success with today’s transaction, which increases our stake in Rosneft and gives us a wonderful opportunity to forge a new partnership with a great Russian oil company.
“We hope to help Rosneft to deliver synergies through its acquisition of TNK-BP and to grow production and reserves through brownfield, greenfield and unconventional opportunities as Rosneft strengthens its position among the world’s leading global energy companies.”
BP Chairman Carl-Henric Svanberg said: “This is the beginning of a distinctive and exciting future consistent with our strategy to invest in Russia and leverage our unique expertise to create value for BP and our shareholders, for Rosneft and for Russia.”
Robert Dudley has been nominated as a candidate to join the Rosneft Board of Directors ahead of completion of the transaction, which underscores the trust of Rosneft’s shareholders. Electing Rosneft Board of Directors members is on the agenda of the Company’s 2012 annual general meeting to be held on June 20, 2013. Mr Dudley is also a member of Rosneft’s steering committee on TNK-BP integration.
Rosneft and BP will now work together to support the integration of Rosneft and TNK-BP, ensuring the implementation of world-leading business and technological approaches.
In addition BP and Rosneft intend to identify possible opportunities for joint work on standalone projects, both in Russia and internationally.
Editor’s Notes:
— The buy-back programme may be suspended at any time. The pace at which the buy-back programme is executed is determined by market capacity, as well as applicable regulations. At current volumes, BP estimates the buy-back programme could take 12 to 18 months to complete.
— BP initially invested around $8bn in its 50% interest in TNK-BP in 2003. Since then TNK-BP has grown its production by 41%; has replaced its reserves by an average of 125% a year; and has paid more than $190bn in duties, taxes and excise to the Russian government.
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