Despite the challenges of setting…
The resignation of General Michael…
Its official, OAO Rosneft has agreed to buy TNK-BP for $54.8 billion, in what will be the third biggest oil acquisition ever. The deal will turn the Russian, state owned, Rosneft into the joint largest, publically traded oil producer in the world, matching ExxonMobil, and granting it 40% of Russia’s crude output.
This deal is an important part of President Vladimir Putin’s plan to bring the oil and gas industry back under government control following its privatisation in the 1990’s after the collapse of the Soviet Union.
Rosneft bought out the AAR, the conglomeration of Russian billionaires who owned half of TNK-BP, for $28 billion in cash, whereas BP was offered a cash and shares deal worth a total $26.8 billion. According to Bloomberg, BP will receive $17.1 billion in cash and 12.8 percent of Rosneft, however it has deciede to reinvest $4.8 billion and increase its stake to 19.75 percent, with two seats on the board.
Related Article: Clinton Thinks Azeri Gas is Important and so Should You
Bob Dudley, the Chief Executive Officer of BP, commented that “Rosneft is a company working to become a global leader. BP looks forward to being able to contribute to Rosneft’s success and add value through our participation on the board.”
The only two oil and gas acquisitions that have occurred previously are the $80 billion merger between Exxon and Mobil Corp, and BP’s $56 billion takeover of Amoco Corp, both in 1998.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…