The BP plc (ADR)(NYSE:BP) and the AAR, or the Russian billionaires who jointly owned the company, are going to sell TNK-BP off to OAO Rostneft. This deal, if it goes through, is sure to make the oil production of Russia even stronger than it was before. OAO, the state-run oil mill will be able to produce a lot more, doubling the size of the company.
The AAR group wants to sell their end of the 50 percent ownership to Rosneft, and for that, the conglomeration has been demanding for about $28 billion. BP wants to sell some of its stakes in TNK BP, but not just for cash. The company wants a mixture of cash, as well as company shares from the state-run oil company. This news came from an official who wished to remain anonymous before the deal actually fell through between the three groups. All three of these groups, which is to say, Rosneft, AAR and BP refused to comment upon the information leaks.
Vladimir Putin, the president of Russia has managed to strengthen his hold over the energy sector by controlling Rosneft and its dealings. Igor Sechin, who is the Chief Executive officer for Rosneft, has been a Putin supporter for about twenty years now. He is due to meet Bob Dudley, the CEO of BP in London tomorrow. If this deal falls through, then Rosneft shall stand to produce about 4.5 million barrels of the oil and the gas, which will make the company so successful. This amount of production can put Rosneft up there with Exxon Mobil Corporation.
One would say that BP is very happy to have the TNK BP selling right now, which effectively ends their relationship with the billionaires, which has always been tumultuous. Their fights have often become quite open and public. BP is a London based explorer, and after the relationship between AAR and them failed in June, they were eager to sell of their part of the joint venture.
According to Arkady Dvorkovich , the Russian Deputy Prime Minister, an agreement of intent had been drawn up, which has been signed by two parties: AAR and Rosneft.