Rosneft to talk to BP about buying TNK-BP stake
NewsLink Blog 7.24.12, covering Reuters article in JRL 2012-134
Rosneft to talk to BP about buying TNK-BP stake - Reuters - Douglas Busvine, Megan Davies - July 24, 2012 - click here to read full article
Reuters reports that state oil company Rosneft has announced talks to buy BP's half-stake in TNK-BP, amidst disputes between BP and its Russian partners. TNK-BP is a decade-old 50:50 joint venture between BP and AAR, a consortium representing oligarchs. It is now Russia's third-largest oil company, estimated to be worth as much as $60 billion. BP reportedly acquired its stake for $7 billion in 2003, with BP's stake now worth $25 to 30 billion. BP has had $19 billion in dividends since buying into TNK-BP, with TNK-BP contributing more than 90% to BP's dividends last year of $4.1 billion.
file photo
Says Reuters:
Rosneft's gambit signals the resolve of new Chief Executive Igor Sechin, the energy "tsar" in Russia's previous government, to build the country's largest oil company into a national champion of global scale.
"Rosneft has an established expertise and track record in managing large assets and considers the potential acquisition of BP's participation in TNK-BP to be an attractive commercial proposition," Sechin said in a statement.
"The potential acquisition would complement its existing portfolio and create value for all stakeholders."
The Russian government might trying to set up an "oil Gazprom" if Rosneft ends up taking over all of TNK-BP, with big windfalls to oligarch cronies:
... analysts speculated ... Rosneft would buy all of TNK-BP [to] create an 'oil Gazprom' with the sort of geopolitical clout that Russia's state-controlled gas export monopoly can project through its pipeline network.
Such a deal - involving a multi-billion-dollar payday for a group of unpopular business oligarchs - would present the Kremlin with a substantial public-relations challenge ...
As for BP, one analyst suggested that, by dealing with the state, BP would gain access to projects such as ambitious Russian exploration agreements similar to projects involving other major Western energy companies loke ExxonMobil.
Other observers point out that selling would give BP cash to help cover billions in liabilities over the Gulf of Mexico BP disaster of 2010, even as it cuts off existing ongoing cash flows from its current Russian venture.
However, a TNK-BP shareholders' agreement restricts BP from concluding a deal with anyone other than AAR for 90 days. AAR is led by banking-to-retail tycoon Mikhail Fridman. The consortium has expressed willingness to buy half of BP's stake, or alternatively sell its own stake for for cash and BP stock. But AAR blocked Rosneft attempts to take over AAR's share in the past.
click here to read full article at reuters.com
Keywords: Russia, Economy, Business, Investment, Trade - Russian News - Russia - Johnson's Russia List
Rosneft to talk to BP about buying TNK-BP stake - Reuters - Douglas Busvine, Megan Davies - July 24, 2012 - click here to read full article
Reuters reports that state oil company Rosneft has announced talks to buy BP's half-stake in TNK-BP, amidst disputes between BP and its Russian partners.
TNK-BP is a decade-old 50:50 joint venture between BP and AAR, a consortium representing oligarchs. It is now Russia's third-largest oil company, estimated to be worth as much as $60 billion. BP reportedly acquired its stake for $7 billion in 2003, with BP's stake now worth $25 to 30 billion. BP has had $19 billion in dividends since buying into TNK-BP, with TNK-BP contributing more than 90% to BP's dividends last year of $4.1 billion.
file photo
Says Reuters:
Rosneft's gambit signals the resolve of new Chief Executive Igor Sechin, the energy "tsar" in Russia's previous government, to build the country's largest oil company into a national champion of global scale.
"Rosneft has an established expertise and track record in managing large assets and considers the potential acquisition of BP's participation in TNK-BP to be an attractive commercial proposition," Sechin said in a statement.
"The potential acquisition would complement its existing portfolio and create value for all stakeholders."
The Russian government might trying to set up an "oil Gazprom" if Rosneft ends up taking over all of TNK-BP, with big windfalls to oligarch cronies:
... analysts speculated ... Rosneft would buy all of TNK-BP [to] create an 'oil Gazprom' with the sort of geopolitical clout that Russia's state-controlled gas export monopoly can project through its pipeline network.
Such a deal - involving a multi-billion-dollar payday for a group of unpopular business oligarchs - would present the Kremlin with a substantial public-relations challenge ...
As for BP, one analyst suggested that, by dealing with the state, BP would gain access to projects such as ambitious Russian exploration agreements similar to projects involving other major Western energy companies loke ExxonMobil.
Other observers point out that selling would give BP cash to help cover billions in liabilities over the Gulf of Mexico BP disaster of 2010, even as it cuts off existing ongoing cash flows from its current Russian venture.
However, a TNK-BP shareholders' agreement restricts BP from concluding a deal with anyone other than AAR for 90 days. AAR is led by banking-to-retail tycoon Mikhail Fridman. The consortium has expressed willingness to buy half of BP's stake, or alternatively sell its own stake for for cash and BP stock. But AAR blocked Rosneft attempts to take over AAR's share in the past.