THE AAR consortium of billionaires that owns half of TNK-BP has agreed to sell its stake to Russia’s statecontrolled oil producer Rosneft for $28 billion, a source familiar with the matter said on Wednesday.
The tentative deal, struck in Moscow on Tuesday night, would dissolve a lucrative but troubled partnership with BP, which bought into TNK-BP in 2003, and clear the way for the British oil major to forge a strategic alliance with Rosneft.
Rosneft, AAR and BP all declined to comment. BP’s shares rose 3.8 percent to 451.75 pence on the news.
Relations between BP and the Soviet-born tycoons soured again last year when Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik blocked an exploration deal between BP and Rosneft, saying it violated an exclusivity clause in a TNK-BP shareholder pact.
AAR then turned down a $32 billion offer in May 2011 by BP and Rosneft to buy it out from TNK-BP to end the impasse. Relations deteriorated further, with Fridman quitting as TNK-BP’s chief executive in May of this year.
BP put its stake up for sale the following month, in a move that presented the four ‘oligarch’ co-owners of TNK-BP with the unpalatable prospect of going into business with Kremlinbacked Rosneft, which also expressed its interest in BP’s stake.
Although AAR also showed interest in buying BP’s stake in TNK-BP, banks were attracted to finance a Rosneft bid by CEO Igor Sechin’s strong personal ties to Russian President Vladimir Putin.
With at least $15 billion in financing on hand, according to bankers, Rosneft would be well placed to close a purchase of the AAR stake.
Such a deal would be subject to government approval but Sechin, in public comments last week, made it clear that Rosneft’s ambition to invest in TNK-BP enjoyed Putin’s backing.
One government opponent of a Rosneft buyout, Deputy Prime Minister Arkady Dvorkovich, left a financial conference on Wednesday before reporters could question him regarding TNK-BP.
Under the terms of the TNK-BP shareholder agreement AAR should first give BP first option on its stake and only after several months would it be permitted to sell to a third party.
Analysts speculate that BP would waive this stipulation.