Rosneft announced that it has entered into definitive agreements with BP for the purchase of BP’s 50% interest in TNK-BP in exchange for $17.1 billion in cash and 12.84% Rosneft shares currently held in treasury. The completion is subject to regulatory approvals, and is expected to occur in the first half of 2013.

 

In addition, BP has entered into an agreement to purchase from Rosneft’s parent, Rosneftegaz, a further 600 million Rosneft shares, representing a 5.66% stake in Rosneft at a price of $8.00 per share.

 

On completion of the above transactions, BP will hold a 19.75% stake in Rosneft, inclusive of its existing 1.25% interest.

 

Rosneft is in advanced negotiations with the AAR consortium (Alfa Group, Access Industries and Renova) (“AAR”) of a definitive agreement to acquire AAR’s 50% interest in TNK-BP pursuant to the heads of terms announced on 22 October 2012. If and when a definitive agreement is signed, an appropriate announcement will be made.

 

The transaction with AAR is independent of the transaction with BP. Rosneft plans to finance the cash consideration of the transaction from a combination of existing cash resources and new borrowings.

 

The acquisition of 100% of TNK-BP represents a unique and compelling strategic opportunity for Rosneft to create significant value for Rosneft shareholders. The purchase of TNK-BP by Rosneft will make it the biggest publicly listed oil company in the world – above Exxon.