BP sold TNK-BP to Rosneft in 2013, a deal worth $27.5 billion.
The sale marked a significant shift in the ownership structure of TNK-BP, with Rosneft taking control of the company's Russian operations.
This move was a result of BP's decision to exit its joint venture with Alfa-Access-Renova, the Russian investor group that owned the other 50% of TNK-BP.
A fresh viewpoint: Rosneft Oao
Deal with Rosneft
BP is selling its half of TNK-BP to Rosneft, Russia's largest oil producer, for $10 to $15 billion in cash and a 15 to 20 percent stake.
This deal would allow BP to exit its contentious partnership with the consortium of billionaires controlling the other half of TNK-BP.
TNK-BP has been lucrative, paying out around $19 billion in dividends since its inception in 2003, but relations between BP and its Russian shareholders have been rocky.
The company has been plagued by open hostility between the London-based BP and its Russian shareholders, with CEO Bob Dudley even having to flee Moscow in 2008.
Rosneft is run by Igor Sechin, a longtime aide to Russian President Vladimir Putin, which may raise concerns among BP's shareholders about the political dimensions of the deal.
The deal would keep BP in Russia, a country responsible for producing nearly 10 million barrels of crude every day.
A fresh viewpoint: Rosneft
Reaction to the Deal
The deal to swap TNK-BP for a stake in Rosneft has sparked a mixed reaction from investors.
BP's shareholders may worry about the political dimensions of the deal, given that Rosneft is run by Igor Sechin, a longtime aide to Russian President Vladimir Putin.
Some of BP's leading investors have qualms about the move, with five of them reportedly expressing concerns.
TNK-BP has been plagued by outbursts of open hostility between BP and its Russian shareholders, including a campaign of harassment that led Bob Dudley to flee Moscow in 2008.
The deal would allow BP to exit its contentious partnership with the consortium of billionaires controlling the other half of TNK-BP.
Jettisoning the consortium might bring stability to BP's operations in Russia, but it would also draw the company much closer to the Kremlin.
News of the TNK stake sale comes as one of the AAR billionaires, Mikhail Fridman, has said the 50-50 ownership structure no longer serves the interests of each party.
Fridman has announced his resignation as chief executive and is open to proposals, including the sale of his stake in TNK-BP.
For more insights, see: Rockstar Consortium
Performance
TNK-BP's production averaged 1.58 million oil barrels a day in 2005, a 6% increase from 2004.
This significant growth in production showcases the company's ability to expand its operations and meet increasing demands.
The company's Board of Directors made a major decision in 2012, unanimously approving the sale of their share in TNK-BP to Rosneft.
This transaction was reported by the Kommersant newspaper, citing sources familiar with the decision.
Frequently Asked Questions
Why did BP leave Russia?
BP left Russia due to a "fundamental change" after Russia's attack on Ukraine, specifically citing the exit of their shareholding in Rosneft and other businesses. This decision was made in response to the attack, which marked a significant shift in their business approach.
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