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2012 Recap. Successful year for Rosneft

In October, Russian oil giant Rosneft announced a landmark deal to buy 100 % of TNK-BP from British oil major BP and the AAR consortium of Russian billionaire shareholders. Industry experts called it the century’s mega deal. First of all the price which is $60 billion defined the status of the deal.

The deal will be completed in mid-2013. Rosneft will pay the Russian shareholders of TNK-BP in cash while BP will receive $17 billion and almost a 13% stake in Rosneft.

The acquisition of TNK-BP will rank Rosneft among the main giants of the global oil industry. The corporation will become the world leader in production of liquid hydrocarbons and in terms of net profit it will rank 3rd after the Saudi Aramco and National Iranian Oil Company.

The presence of a large minority shareholder in Rosneft will contribute to more active participation of the Russian company in Western projects, Andrei Poleshchyuk, analyst with Brokercreditservice, says.

“Rosneft will become the world’s largest company while BP will be a strategic partner. This will enable Rosneft to enter foreign markets, to get stakes in foreign companies. As for TNK-BP it is an efficient asset which can be used in the future for paying the company’s huge debt as well as for financing own projects or buying new assets in Russia and abroad”.

For Russia the acquisition of TNK-BP by Rosneft is also an opportunity to obtain new experience from the world leading energy companies in such areas as corporate management. In its turn BP will have a significant stake in the large global oil company. The British company already has 1.5% stake of Rosneft and it plans to buy another 5.5% stake in the Russian corporation from Rosneftegaz. As a result BP will hold almost 20% in Rosneft.

The deal also offers the Brits an opportunity to take part in Rosneft’s oil projects in Russia’s Arctic region, Sergey Agibalov, expert at the Institute for Energy and Finances, says.

President Vladimir Putin ordered the government to give the license to Rosneft for the development of 75% of national reserves on the Arctic shelf. This year Rosneft has agreed with three foreign companies on joint explorations in the shelf’s coastal areas. This confirms that now it is a good time for foreign investors to work with Russia, Konstantin Simonov, head of the National Energy Security Fund says.

“Recently, numerous agreements have been signed with non-residents. This year Rosneft signed three large deals with Exxon Mobil, Statoil and ENI. France’s Total has become Novatek’s shareholder and is also participating in the Yamal project”.

However Rosneft won’t be a West-oriented company, the analysts stress. It will continue to export oil products to the East and will focus on development of the relevant infrastructure in the Far East region.

In general 2012 was a successful for Rosneft. According to industry experts, the acquisition of TNK-BP will lead to the growing capitalization of the company. Only in six months during which the deal was discussed the shares of Rosneft were up 20%. Rosneft will continue to strengthen positions on the energy market and to develop its resource base. In prospect, in 2013, large geological explorations in Siberia, Black Sea and the Arctic region are in sight.

By Daria Manina

The Voice of Russia, January 7, 2013


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