EMEA News
BP to Sell Stake in Russian Joint Venture, Get Rosneft Stock
UK-based oil company BP will sell its 50 percent stake in Russian oil firm TNK-BP to Rosneft, giving that company about half of Russia's energy sector and making it the world's largest publicly traded oil group, BBC News reports.
BP will get a 12.84 percent stake in Rosneft immediately, along with $17.1 billion cash, and it has agreed to eventually increase its ownership of the company to 19.75 percent.
BP has made billions of dollars from its part in TNK-BP, but the joint venture has also caused problems for the company, including conflicts with its partners and problems with Russian authorities.
Bob Dudly, now the head of BP, had his office raided and fled the country in 2008 when he led TNK-BP.
BP's stake in Rosneft will allow it to keep taking advantage of energy resources in Russia, including in the Arctic, where the UK company's expertise may help Rosneft handle difficult conditions.
Two BP representatives will take seats on Rosneft's board.
The Russian Arctic is becoming a major focus for energy companies as historic low ice melt makes the area more accessible, though concerns remain about the environment and about the economics of drilling in the region, according to Russian news agency RIA Novosti.
"By 2050, the Arctic would be like the Persian Gulf or the Western Siberia now," said Anatoly Zolotukhin, a retired oil industry professional and a vice-rector at the Gubkin Russian State University of Oil and Gas in Moscow.
