Rosneft Closes On Purchase of TNK-BP

The Russian government-controlled Rosneft closed the purchase of TNK-BP from the Alfa-Access-Renova (AAR) consortium.

The Russian government-controlled Rosneft has closed on its announced $55 billion purchase of TNK-BP from the AAR Consortium.

The purchase was announced in December and marks the largest oil producer. Many market analysts did not expect closing until later in the second quarter.

AAR CEO Stan Polovets said: "Completing this transaction brings to a close more than 15 years of exceptionally successful value creation by the shareholders of AAR, who have helped build TNK-BP into a world-class oil and gas company. This paves the way for Alfa, Access and Renova to capitalize on major new opportunities in Russia and around the world."

BP Plc is a major shareholder in the new TNK-BP. "This is a historic day for BP in Russia," BP Chief Executive Robert Dudley said. "BP has invested in Russia for more than 20 years and for a decade we have been Russia's largest foreign investor through our involvement with TNK-BP."

Rosneft bought 50% of TNK-BP for $27.73 billion from the AAR consortium and purchase the remaining half of the shares from BP for $16.8 billion and 12.8% Rosneft shares. Rosneft received financing through two separate loan agreements from a group of international bankers to complete the acquisition. BP also bought an additional 5.66% in Rosneft, increasing its holding in the company to 19.75%.

BP has two seats on the Rosneft board, including one offered to Dudley, who served as chief executive of TNK-BP until 2008.