Russia’s state-owned oil giant Rosneft finalized the deal for the purchase of TNK-BP last Thursday to become the world’s largest publicly traded oil company. The deal for the purchase of TNK-BP from Britain’s BP and the AAR consortium of Russian billionaire shareholders places Rosneft ahead of ExxonMobil in terms of crude production. The deal is worth $56 billion
“Rosneft and BP today completed a number of transactions, in line with the terms announced in October 2012,” Rosneft said in a statement. For further information regarding this October 2012 announcement, visit BP Agrees to Sell Its Stake in TNK-BP to Rosneft
BP is receiving a net payment of $12.5 billion in cash, including a TNK-BP dividend of $0.7 billion and an 18.5 percent stake in Rosneft. Rosneft is getting BP’s 50 percent interest in TNK-BP in exchange for $16.7 billion in cash and 12.8 per cent of Rosneft shares.
In a separate part of the deal, Rosneft paid $27.7 billion in cash to the AAR consortium of Russian billionaire shareholders for their half of TNK-BP. BP has added to existing holdings and now controls a 19.75 percent stake in the Russian oil giant.
“This is the acquisition of a strategic partner in a new quality and I hope this will bring new technologies and new projects,” President Vladimir Putin said at a meeting with the heads of Rosneft and BP.
This deal spells an end to the British major’s fractious arrangement with its TNK-BP partners at AAR while granting BP a more secure position in Russia’s energy landscape, giving access to the nation’s oil-rich Arctic region. Also it will allow BP to raise the cash it needs to finance outstanding compensation for the 2010 Gulf of Mexico spill from its Deepwater Horizon rig.
Rosneft chief executive Igor Sechin says his company is set to produce 206 million tons of oil and 47 billion cubic meters of gas in 2013 and would account for 5 percent of global oil production. In comparison, ExxonMobil has an output of 115 million tons of oil per year according to Rosneft. In addition, Rosneft will now have proven international category reserves of more than $5 billion tons of oil equivalent.
“Oil production will rise from 2.4 million barrels per day to 4.1 million bpd and overall output (of hydrocarbons) will grow to 4.6 million barrels (of oil equivalent) per day from the current 2.6 million bpd,” Sechin said at the time.
Both TNK-BP, and Rosneft, like BP, manufacture and market lubricants. TNK Lubricants, a subsidiary of TNK-BP, is a blender and marketer of a full line of automotive and industrial lubricants. Also, TNK-BP is the distributor for Valvoline lubricants in Russia (for further information, please see our story TNK-BP to Distribute Valvoline™ Lubes in Russia in the April 23, 2012 issue of the OEM/Lube News.
Rosneft has a lube base oil plant located in Angarsk, Russia with a capacity to produce 5,750 bpd API Group I lube base oils while the company also has the capacity to produce 3,800 bpd API Group I lube base oils at its refinery at Novo Kuibyshev, Russia. TNK-BP's 50 percent owned Slavneft also produces lube base oils at its refinery at Yaroslavl, Russia with a capacity of 4,800 bpd Group I lube base oil.
