BP, Rosneft Complete TNK-BP Deal - Analyst Blog
22 Marzo 2013 - 3:40PM
Zacks
British energy giant BP
plc (BP) and Russia’s state-operated oil company, OAO
Rosneft, have finally closed their deal related to TNK-BP, ahead of
schedule.
BP divested its 50% stake in TNK-BP in line with the terms
announced in Oct 2012. BP was entitled to receive $17.12 billion in
cash and shares, giving it a 12.84% equity stake in Rosneft.
Second, the UK giant had planned to buy an additional 5.66% share
in Rosneft from the Russian state with approval already granted.
For this, BP was supposed to siphon $4.87 billion from the cash
proceeds.
Subsequently, BP received a final amount of $16.65 billion from
Rosneft after adjustments. This excluded a dividend of $0.71
billion received by BP in Dec 2012 from TNK-BP. In accordance with
the deal, BP used $4.87 billion of the proceeds to acquire a 5.66%
share in Rosneft from ROSNEFTEGAZ. Therefore, BP received a net
amount of $12.48 billion after adjusting for a dividend of $0.71
billion received for TNK-BP as well as an 18.5% share in
Rosneft.
As a result of these transactions, BP has raised its ownership in
Rosneft to 19.75% taking into consideration its existing minority
stake of 1.25% in the Russian company.
This deal makes Rosneft the world's biggest listed oil company in
terms of market capitalization. BP, for its part, stands to gain
essential access to hydrocarbon reserves in the remote Arctic belt
of Russia. BP’s sale of TNK-BP’s stake has helped it in simplifying
its operations in Russia via a major strategic shift. We note that
BP is also busy in reshaping its portfolio through the divestiture
of smaller non-core properties to help pay spill-related costs
while holding onto potential big resources.
Since 1998, BP and Rosneft have worked together in the exploration
of the offshore Sakhalin Island. The pair also shares 50:50
ownership in the joint venture entity – Ruhr Oel GMBH − that owns
stakes in 530,000 barrels per day of refining capacity in
Germany.
BP carries a Zacks Rank #3 (short-term Hold rating). However, there
are other stocks in the energy sector, namely, Enerplus
Corporation (ERF), Range Resources
Corporation (RRC) and EPL Oil & Gas,
Inc. (EPL) , which carry a Zacks Rank #1 (Strong Buy) and
are expected to perform impressively over the next few months.
BP PLC (BP): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
ENERPLUS CORP (ERF): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
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