BP plc is using $4.5 billion of cash it has received from OAO Rosneft to pay down its debt, the company said Friday. The funds have been received by BP as part of the deal it made with the Russian state oil company to take over the UK firm's 50-percent stake in TNK-BP Ltd.
In October, BP agreed a deal with Rosneft that has seen it acquire 18.5-percent of the Russian firm's stock as well as some $12.5 billion in cash. BP will use $8 billion in a program to buy back its own stock.
BP Chief Executive commented in a company statement Friday:
"BP is moving on to the next phase of its business in Russia, becoming the largest private shareholder in Rosneft, Russia's leading oil company. In the process we have also released cash, equivalent to at least six years of BP's anticipated future dividends from TNK-BP. We look forward now to working closely with Rosneft and together developing opportunities to create value for both companies."
The $4.5 billion is designed to help BP maintain a strong balance sheet as it continues to pay out billions of dollars in damages as a result of the Deepwater Horizon disaster in April 2010.
In November 2012, BP and the U.S. government agreed to resolve all Federal charges and all Securities and Exchange Commission claims connected to Deepwater Horizon in return for $4.5 billion.
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