Rosneft and BP Reportedly Close to TNK-BP Deal

Rosneft is reportedly nearing an agreement with supermajor BP to acquire BP's 50 per cent stake in TNK-BP, various media outlets have reported.

One outlet, Russian daily Kommersant, has reported that the deal many see BP take a 12.5 per cent stake in Rosneft in exchange for Rosneft taking BP's 50 per cent stake in the Russian joint ventue TNK-BP. Citing two sources close to the matter, BP would take the 12.5 per cent stake at a cost of $10 billion in cash and $15 billion in shares.

Rumours about BP and Rosneft's cooperation on a deal for TNK-BP have continued to gain tarction this week following a meeting between the companies and Russia President Vladimir Putin on Tuesday. Though no definitive details were released by the Kremlin following the meeting, it was reported that Vladimir Putin met with CEO of Rosneft Igor Sechin and BP's CEO Bob Dudley and Chairman of the Board Carl-Henric Svanberg. At the meeting, the parties discussed "the continuation and broadening of BP’s presence on the Russian market, as well as prospects for cooperation with Russian companies," a statement from the Kremlin said.

Last week it was reported that Russian Deputy Prime Minister Arkady Dvorkovich was hesitant on a deal between Rosneft and BP for the TNK-BP saying the government would have to se ehow the necessary funds would be raised before sanctioning any deals.

"This purchase won't happen without the government's approval," he said. "You don't find $30 billion lying around on the street. This means we have to see how the money would be raised, how quickly it is returned in the form of TNK-BP dividends, how it would affect Rosneft's financial situation, and whether it would bring other projects to a halt."

BP has had its stake in TNK-BP up for sale since June of this year when it confirmed that it was selling its stake following unsolicited interest in the company. Partner Alfa Access Romeo (AAR) said in July that it was interested in taking half of BP's stake (25 per cent overall in the company). However no deal between the two has yet been struck.