Rosneft Becomes World's Largest Listed Oil Producer with Completion of Deal
MOSCOW - Russian state oil giant OAO Rosneft Thursday closed deals worth around $55 billion to take over TNK-BP and become the world's largest listed oil producer, with BP PLC as a major shareholder.
BP Chief Executive Officer Bob Dudley and Rosneft CEO Igor Sechin met with Russian President Vladimir Putin at his residence outside Moscow to announce the closing of the deals.
After Mr. Putin congratulated the two companies on the deal, Mr. Dudley said BP "stands firmly behind" Rosneft, Russian newswires reported.
Rosneft handed BP $16.7 billion in cash and 12.8% in Rosneft shares for the U.K. major's 50% stake in TNK-BP, the companies said in a joint statement. BP acquired 5.7% additional shares in Rosneft from state holding company Rosneftegaz for $4.9 billion. BP, which already owned a small stake in Rosneft, now owns nearly 20% of Rosneft.
Rosneft paid AAR, a group of tycoons who owned the other half of TNK-BP, $27.7 billion for their stake.
Mr. Sechin will chair a committee on the integration of Rosneft and TNK-BP. Mr. Dudley, who will also sit on the committee, has been nominated to Rosneft's board.
"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," Mr. Sechin said in the statement.
BP and Rosneft intend to identify possible opportunities for projects in Russia and internationally, the companies said in the statement.
"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," Mr. Dudley said.
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