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Rosneft agrees to acquire a 50% stake in TNK-BP from BP

22 October 2012

Rosneft today announces that it has entered into an agreement in principle with BP to acquire its 50% interest in TNK-BP in exchange for $17.1 billion in cash and 12.84% Rosneft shares currently held in treasury.

In connection with the proposed transaction, BP has offered to purchase from Rosneft’s parent, Rosneftegaz, at a price of $8.00 per share, an additional 600 million Rosneft shares, representing a 5.66% stake in Rosneft. Rosneftegaz has until 3 December 2012 to accept this offer.

Rosneft and BP have agreed a 90-day exclusivity period for negotiations to enter into a definitive sale and purchase agreement with respect to TNK-BP. The execution of the final documentation is conditional on the Russian government approving the sale by Rosneftegaz of 600 million ordinary Rosneft shares and final board approvals of the TNK-BP transaction by Rosneft and BP. In addition, completion of both transactions would be subject to customary conditions, including regulatory and other approvals, and is expected to occur at the same time, in the first half of 2013.

On completion of the above transactions, BP would hold a 19.75% stake in Rosneft, inclusive of its existing 1.25% interest. Under Russian law, this shareholding would entitle BP to two seats on Rosneft’s 9-person board of directors.

The acquisition of 50% of TNK-BP represents a unique and compelling strategic opportunity for Rosneft to create significant value for Rosneft shareholders.

  • Rosneft believes that there is considerable synergy potential between the two companies, including joint upstream development opportunities, optimisation of crude and product supply logistics and other cost savings.
  • The transaction brings an attractive partner for Rosneft with a successful track-record of applying best international practices in Russia.
  • TNK-BP is an attractive investment for Rosneft, which is expected to be accretive to earnings from the outset.
  • This transaction will enhance Rosneft’s ability to improve efficiencies through portfolio optimisation.

Igor Sechin, President and Chairman of the Management Board of Rosneft, said:

“Rosneft’s acquisition of a strategic stake in TNK-BP would be a major step in expanding the core business of Rosneft and would be a value creating investment for our shareholders given the significant production growth and synergy potential.

Rosneft would welcome BP as a significant investor in the company, and I strongly believe that we would benefit from BP’s experience and its track-record of implementing best international practices in Russia. I am especially pleased that BP has chosen to remain as one of the largest foreign investors in the Russian economy recognising the potential of both Rosneft and the Russian oil and gas sector.”

Rosneft will finance the cash consideration of the transaction from a combination of existing cash resources and new borrowings.

In addition, Rosneft has agreed heads of terms with the AAR consortium (Alfa Group, Access Industries and Renova) (”AAR”) to acquire AAR’s 50% interest in TNK-BP for cash consideration of $28.0 billion, subject to the negotiation of definitive agreements, corporate and regulatory approvals and certain other conditions.

The transaction with AAR is entirely independent of the transaction with BP.

Bank of America Merrill Lynch and Citigroup Global Markets Ltd are acting as joint financial advisers to Rosneft in connection with the contemplated transactions. Cleary Gottlieb Steen & Hamilton LLP is acting as legal adviser to Rosneft.

Rosneft will host a conference call for analysts and investors at 12:30 p.m. Moscow time on 23 October 2012.

October 22, 2012

Rosneft Information Division
Tel.: +7 (495) 411 54 20
Fax: +7 (495) 411 54 21

Pelham Bell Pottinger
James Henderson / Nick Lambert /
Rollo Crichton-Stuart / Elena Dobson
+44 20 7861 3232

Notes to editors:


TNK-BP is a vertically integrated Russian oil company operating a diversified upstream and downstream portfolio, with assets in Russia, Ukraine, Belarus, Venezuela, Vietnam and Brazil. TNK-BP owns 95% in publicly listed TNK-BP Holding and c.50% in Slavneft, a vertically integrated Russian oil company, among other assets. TNK-BP is Russia’s third largest oil producer, employs c.50 thousand people and operates in Russia’s major hydrocarbon regions, including West Siberia, Volga-Urals and East Siberia.

As of December 2011, TNK-BP had proved reserves of 10.1bn barrels of oil equivalent under SEC standard and 14.9bn barrels of oil equivalent under PRMS standard. TNK-BP has achieved production growth in each of the last three years, reaching an average daily production of 1,987 thousand barrels of oil equivalent in 2011. The company has interests in seven refineries in CIS, including indirect holdings through Slavneft, with a total throughput in 2011 of 747 thousand barrels per day. TNK-BP operates a network of 1,388 retails stations. In 2011, TNK-BP generated revenues of $60.2bn and net income of $9.7bn.


BP is a leading international oil and gas company engaged in the exploration, production, refining and distribution of natural gas, petroleum and other related products. The company employs c.83 thousand people and has exploration and production activities in 30 countries with major interests in the U.S., Russia, Azerbaijan, Angola, the United Kingdom, North Africa, Canada, the Middle East and Asia.

At the end of 2011, BP had proved reserves of 17.8bn barrels of oil equivalent under SEC standard. BP’s average daily production of hydrocarbons in 2011 reached 3,454 thousand barrels of oil equivalent, including its share of TNK-BP. As of the end of 2011, BP had interests in 16 refineries with a throughput of 2,352 thousand barrels per day and 21,800 BP branded retail sites. In 2011, BP generated revenues of $375.5bn and net income of $26.1bn. BP’s market capitalisation is $136.9bn as of 19 October 2012.

These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.