BP Poised To Take 10% Of Russia's Rosneft
BP is poised to acquire a stake of more than 10% in Rosneft, the Russian state-owned oil giant, as part of a restructuring of its interests in the country.
I understand that BP expects to receive a cash-and-shares offer from Rosneft ahead of a 9am deadline tomorrow that would be valued at roughly $28bn (£17.3bn), the same price attributed to the 50% stake in TNK-BP held by a group of Russia-based businessmen.
Igor Sechin, the Rosneft chief executive, is due to meet Bob Dudley, his BP counterpart, at the British company's central London headquarters on Wednesday night to negotiate a deal. A team of BP executives is also basing itself at the City offices of Linklaters, its legal adviser on the proposed deal.
BP executives will discuss offers for its shareholding in the joint venture with their financial advisers tomorrow, with BP's board expected to decide on a preferred bidder when it meets on Friday afternoon.
I revealed earlier today that AAR, the quartet of oligarchs' holding company for their TNK-BP stake, had agreed an outline deal with Rosneft for the state-owned energy company to buy their stake for $28bn. The agreement was struck in Moscow on Tuesday night.
The exact size of BP's stake in Rosneft is not yet clear and will depend on whether Rosneft splits the $28bn price-tag equally between cash and shares.
A $14bn (£8.6bn) cash windfall would be welcomed by BP, which is continuing to negotiate over the final financial toll of the Gulf of Mexico oil spill with US authorities.
Senior BP executives believe that a stake of between 10% and 15% in Rosneft will give them prized access to alliances with what would become the world's largest publicly-listed oil company by virtue of its takeover of TNK-BP.
The deal would differ from a share swap agreed between BP and Rosneft in January 2011 in that Rosneft will not acquire a shareholding in BP as part of any agreement.
That transaction was scuppered by a legal battle with AAR. The oligarchs are considered likely to drop any remaining legal claims against BP if they complete a deal to sell their shareholding to Rosneft.
Major BP shareholders broadly welcomed news of the proposed shake-up of BP's Russian interests, with one saying it represented "a great price for Bob Dudley".
BP and AAR declined to comment.