Business

Russia’s Rosneft buys TNK-BP

Now world’s top producer of oil

The new combined Russian company of Rosneft and TNK-BP will leapfrog ExxonMobil Corp. to become the world’s largest publicly traded producer of oil and gas, in terms of daily output with 4.6 million barrels compared with 4.2 million by ExxonMobil.
Maxim Shemetov/Reuters
The new combined Russian company of Rosneft and TNK-BP will leapfrog ExxonMobil Corp. to become the world’s largest publicly traded producer of oil and gas, in terms of daily output with 4.6 million barrels compared with 4.2 million by ExxonMobil.

MOSCOW — Russian state-owned oil giant Rosneft strengthened its hold on the country’s lucrative oil industry when it sealed a deal Monday to buy TNK-BP, the 50-50 joint venture between BP, the British energy country, and a group of Russian oil oligarchs.

The deal will allow Rosneft, already the country’s top oil producer, to increase its global profile. The new combined company will leapfrog ExxonMobil Corp. to become the world’s largest publicly traded producer of oil and gas, in terms of output.

ExxonMobil’s latest earnings show its daily output at 4.2 million barrels of oil, below the expanded Rosneft’s projected 4.6 million.

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As part of the deal, BP succeeds in unloading its stake in a troublesome joint-venture. In return, it gets $17.1 billion in cash from Rosneft and a 12.84 percent stake in Russia’s biggest oil company. The British company is also planning to use some of the money it has reaped from the sale to raise its stake in Rosneft to 19.75 percent. BP will also get two seats on the Russian company’s nine-member board.

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In a parallel development, Rosneft said it had agreed to buy the other 50 percent in the joint venture from AAR, for $28 billion, and that the deal was ‘‘entirely independent of the transaction with BP.’’

Rosneft, formed in 1993 out of the former Soviet state oil and gas authority, is currently 75 percent owned by the government.

The remaining shares are either traded publicly on the Russian stock market or owned by the company and its managers.