Be nice to the little guy

Rosneft has finally caved in to pressure and offered to buy out minority shareholders in TNK-BP at a premium to the market price.

Minorities believe they got a raw deal when Rosneft took over the Anglo-Russian oil major this year and are hoping to do better. Rosneft thinks it’s doing them a favour, but the end to this saga is still a long way off. Read more

Minority shareholders in TNK-BP got a raw deal when Rosneft took over the Anglo-Russian oil major this year.

But even if the odds are stacked against them, they’re not yet ready to give up the fight. Having failed to persuade Igor Sechin, Rosneft’s chief executive, to offer a fair price for their shares, the minorities have taken the bold step of launching a personal attack on the close associate of president Vladimir Putin. Read more

Rosneft has been warning minority shareholders in TNK-BP not to expect any favours, ever since it took over the Anglo-Russian oil producer. All the same, it’s a disappointment for these shareholders – who have regularly received fat payouts – to learn on Thursday that they won’t be getting any dividends this year.

Minority shareholders – mostly foreign long term investors – hold around 5 per cent of TNK-BP Holding, the listed unit of TNK-BP, that was acquired by Rosneft together with the parent company in a deal announced last year and completed this March. Read more

Compromise is often seen as a sign of weakness in Russia so it’s encouraging to see one of the country’s most powerful men giving ground in a high profile conflict over corporate governance. Six months after denying that Rosneft had any obligations to minority shareholders in TNK-BP’s listed unit, Igor Sechin, the chief executive of Russia’s state oil company, appears to be backing down. Read more

The $55bn sale of BP’s troubled Russian partnership, TNK-BP, to Russia’s Rosneft has created a new oil major – from size, that much is clear.

But what will be the effect on trade? Harder to say, but the International Energy Agency has mapped out a few scenarios in its April report. Some would have a big impact on oil supplies to other countries. Read more

Photo: Bloomberg

Only five years ago Robert Dudley was barred from entering Russia as BP fought a vicious corporate battle with its local joint-venture partners in the oil major TNK-BP. But times have changed and so has the shape of the Russian oil industry. In what is being seen as a goodwill gesture, the Kremlin has offered BP’s chief executive a seat on the board of Rosneft as Russia’s national oil company moves to complete its takeover of TNK-BP. Read more

While Rosneft is busy raising billions of dollars to pay for the take over of TNK-BP, the Anglo-Russian oil major is carrying on in its own sweet way and planning, among other things, a five-fold increase in production from foreign oil projects. Don’t expect any objections from Rosneft. Russia’s state oil company has its own far greater global ambitions. Read more

Photo: Bloomberg

Commonsense would suggest that TNK-BP, in the process of being swallowed up by Rosneft, would be collaborating with Russia’s state oil company by now.

Instead the Anglo-Russian oil major went head to head with Rosneft at the auction of a big east Siberian oil field last month and came out on top. Read more

Photo: Bloomberg

For BP and its Soviet-born billionaire partners in TNK-BP, Rosneft’s mega deal to buy 100 per cent of the Russian oil venture is an enormous $55bn payday on an investment that has already paid out $38bn in dividends.

But minority investors in the main holding of TNK-BP risk being caught stranded – and indeed squashed – in the biggest deal in Russian corporate history, a state of affairs that investors say speaks volumes about the sorry state of Russia’s investment climate. Read more

State-owned Rosneft buys TNK-BP Photo Bloomberg

Russia’s government did its best on Wednesday to affirm its continued commitment to privatisation plans, despite carrying out what is in effect the largest nationalisation in post-Soviet history this week.

Andrei Belousov, economy minister, insisted that the purchase of 100 per cent of oil company TNK-BP by state company Rosneft did not mean the government was rethinking its commitment to rolling back state ownership of the economy. Read more

Stuart Kirk and Oliver Ralph of Lex ask how investors should respond to the decision of UK oil multinational BP to sell its stake in joint venture TNK-BP to Russia’s national energy champion.

Set aside the details for the moment and look at the big picture. BP is swapping its 50 per cent in the troubled BP-TNK joint venture for 18.5 per cent of Rosneft plus a mountain of money – $12.3bn.

With its existing 1.25 per cent Rosneft stake, that makes 19.75 per cent. Will that be enough to secure real influence over the state-controlled behemoth? Read more

White smoke above BP headquarters. The company on Monday announced that it had a $27bn deal to sell its its stake in TNK-BP to Rosneft.

Rosneft confirmed that, as well as buying out BP, it would acquire the other half of TNK-BP from AAR, a consortium of Russian oligarchs, for $28bn. Read more

Finally, after nearly a week of very well-informed reports, BP on Monday gave word on the oil deal of the year.

Those who expected confirmation that the deal is already done will be a tad disappointed. Monday morning’s statement said:

BP confirms it is in advanced discussions with Rosneft regarding the sale of its 50% interest in TNK-BP. No agreement has yet been reached. A further announcement will be made if and when an agreement is reached.

However, as the FT reports, the two sides are still expected to announce a deal later very soon – perhaps even before the end of business on Monday. Read more

A police officer walks past a plaque of the oil firm TNK-BP©Reuters

BP’s board has approved a $27bn deal with the Russian state oil company Rosneft to sell its stake in TNK-BP which should seal the UK energy group’s future in Russia for decades to come.

The deal means BP will swap its troublesome partnership with a group of Russian oligarchs for an alliance with arguably Russia’s most powerful company – the Kremlin-backed national energy champion.

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Catch up with the week on beyondbrics, with the ten most popular stories from the blog, a few things we’ve learnt, and a chart. This week: the Rosneft/TNK-BP deal. Read more

Rosneft‘s proposed $50bn-plus takeover of TNK-BP, buying out BP and its Russian oligarch partners, will turn the state-run group into one of the world’s largest oil producers controlling nearly half Russia’s output.

For those who believe that bigger is better, including Rosneft chief executive Igor Sechin and his political master president Vladimir Putin, this is a triumph. For BP and its partners, the end of a troubled, if profitable, relationship will come as a relief.

But for Russia as a whole – and for the global oil industry – Rosneft’s coup is, at best, a mixed blessing. Read more

BP received a formal offer from Rosneft for its 50 per cent share in TNK-BP, in a cash and shares deal worth around $28bn, the FT reported on ThursdayRead more

The chief executive of Rosneft will on Thursday finalise a deal with BP that will turn the Russian national champion into the world’s largest publicly traded crude oil producer.

Igor Sechin, who flew in to London from Moscow on Tuesday, is looking to acquire BP’s 50 per cent stake in its troubled Russian joint venture TNK-BP in a cash-and-shares deal worth around $28bn, according to a person familiar with the matter. It would be $15bn-$20bn in cash plus a stake of between 10 and 20 per cent in Rosneft, the person said.

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The outline agreement by BP’s billionaire partners in TNK-BP to sell their stake to Rosneft for about $28bn is a very big deal indeed – Russia’s largest to date by value.

But it seems likely to pave the way for an even bigger one: Rosneft taking control of the whole of the joint venture by buying out BP’s 50 per cent stake too. Read more