BP and Rosneft in talks to finalise details of £17bn Russian oil deal - Business News - Business - The Independent

BP and Rosneft in talks to finalise details of £17bn Russian oil deal

BP could unveil a $28bn (£17bn) deal with the Russian state-controlled oil group Rosneft as early as today.

The British oil major is expected to sell its half of Russia's third-largest oil company, TNK-BP, to Rosneft for between $25bn and $28bn.

The deal will see BP take a stake of between 15 and 20 per cent in Rosneft and up to $14bn in cash. BP and Rosneft are also expected to take seats on each other's boards.

The details were being negotiated over the weekend with an announcement expected early this week.

The tie-up will give BP access to the vast reserves in the Russian Arctic, which are thought to hold more than 10 billion barrels of oil and nearly 3 trillion cubic metres of gas. BP is expected to return some of the proceeds to investors as a special dividend.

Rosneft, meanwhile, will consolidate its dominant position in the Russian oil industry. The company, headed by President Vladimir Putin's former chief of staff Igor Sechin, is also set to take over the 50 per cent in TNK-BP owned by four Russian oligarchs, giving it control of more than half the country's oil industry. It marks the latest in a series of steps by Russia to regain control of assets privatised in the 1990s, including the takeover of the oil firm Yukos in the mid-2000s, which was also overseen by Mr Sechin.

Rosneft is listed on the London Stock Exchange but is majority-owned by the state. The TNK-BP takeover will make it the world's largest listed oil company, producing more than 4 million barrels of oil a day –about 40 per cent of Saudi Arabia's output.

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