The City cheered yesterday as BP finally resolved its troubled relationship with TNK-BP by agreeing to sell its half of the Russian joint venture to Rosneft for a "good price" of $27bn (£17bn) in cash and shares.
But while analysts and investors were broadly satisfied with the price, they were unhappy with the make-up of the deal, in which Rosneft will pay BP only $12.3bn of cash, with the remainder of the proceeds coming from an 18.5 per cent stake in the Kremlin-controlled giant and two seats on the board.
Andrew Whittock, an analyst at Liberum Capital, said: "The headline number is good. But the cash component is a bit less than I would have hoped for and the shares are a bit more."
"It's not as good as an all-cash deal, but it's better than no-cash deal," added Stuart Joyner, an analyst at Investec.
The deal allows BP to sever its ties with the AAR quartet of billionaires which owns the other half of the venture in what has amounted to a highly fraught nine-year relationship.
This has included court cases and harassment claims by Bob Dudley, former head of TNK-BP and now BP's chief executive.
Ildar Davletshin, an oil and gas analyst at Renaissance Capital, said the deal "strategically looks very positive for BP" which has replaced "a private partner for a strategic national company which has much bigger access to resources in Russia and has much bigger political support".
Rosneft's deal with BP is one of two the Russian giant announced yesterday. In the other deal, Rosneft agreed to buy AAR's stake in TNK-BP for $28bn in cash.
This will leave Rosneft with full control of the venture, increasing its daily production from 2.6 million barrels of oil equivalent a day to 4.6 million and transforming it into the world's biggest public oil company.
Mr Dudley said: "BP intends to be a long-term investor in Rosneft."
BP intends to use some of the proceeds to "continue with its progressive dividend policy" as the company seeks to return its payouts to their level before the Gulf of Mexico oil spill.
The agreement to sell BP's 50 per cent stake to Rosneft, which still has to be signed off by the Russian government, is expected to be finalised early next year.