BP set to get Rosneft offer for TNK-BP stake

http://www.bbc.co.uk/news/business-19987526

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BP is expected to receive an offer from Russian oil giant Rosneft worth $28bn (£17bn) for its stake in the Russian TNK-BP joint venture.

BBC business editor Robert Peston said an offer was "pretty certain".

BP said in June that it was selling its half stake in TNK-BP following problems in relations with the Russian billionaires who own the rest of it.

The deal to buy BP's stake would make Rosneft the world's largest publicly traded oil company.

<ul class="links-list"> <li><a href="/news/correspondents/robertpeston/" >Read more from Robert</a></li> </ul>

The key question in the potential deal is how much cash will be offered and whether BP will end up with a 10% or 20% stake in Rosneft.

On Tuesday, the four Russian billionaires who own the other half of TNK-BP through their firm AAR signed a memorandum of understanding to sell their stake to Rosneft at a later date.

Rosneft has stressed that neither deal has yet been finalised.

"We continue to evaluate a number of opportunities and will update the market as and when appropriate," the company said in a statement.

In July, AAR expressed an interest in increasing its share of the joint venture to 75%.

This gave it "preferred bidder" status and triggered a 90-day period in which no other interested party would be allowed to conclude a deal with BP.

That period ended at midnight on 17 October. Other bidders were then given a deadline of 0900 BST on Thursday to make offers for the business.

BP's board is expected to discuss the offers on Friday and reach a decision over the weekend.

Relations between BP and AAR had been strained for some time, but the problems came to a head last year when AAR was unhappy about BP's attempt to form an exploration alliance with Rosneft. It secured a High Court injunction blocking the plan.

TNK-BP is important to BP financially as it accounts for about 10% of its profits.

Since 2003, BP has invested $8bn into TNK-BP and has received about $19bn in dividends.

TNK-BP produces about two million barrels of oil and gas per day. BP produces about 2.3 million barrels, excluding TNK-BP.