The long saga of BP PLC (NYSE: BP) and its operations in Russia is just about wind up. The U.K. firm today closed the sale of its 50% stake in TNK-BP to Russia’s Rosneft in exchange for about $12.5 billion in cash and a 19.75% stake in what is now Russia’s — and the world’s — largest oil company measured by production.
BP CEO Robert Dudley, who was once virtually kicked out of Russia, has been nominated for membership on Rosneft’s board.
Rosneft paid $27.7 billion to Alpha Access-Renova (AAR), a company controlled by three of Russia’s richest oligarchs, for their half of TNK-BP earlier this year.
Rosneft’s chairman said:
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.
Russia, and Rosneft, are looking to hike oil exports to China to around 1 million barrels a day by 2018. The increase is expected to help fund up to $30 billion in refinancing the loans Rosneft took on for the TNK-BP acquisition.
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