State-controlled Rosneft announced it reached an in-principle agreement with BP to buy out its half of TNK-BP in exchange for $17.1 billion in cash and 12.84 percent of Rosneft's shares. BP, in addition, offered to take on another 5.66 percent in Rosneft, a deal the Russian side said it has until Dec. 3 to accept.
"On completion of the above transactions, BP would hold a 19.75 percent stake in Rosneft, inclusive of its existing 1.25 percent interest," the Russian company stated. "Under Russian law, this shareholding would entitle BP to two seats on Rosneft's nine-person board of directors."
Rosneft added that, in a separate deal, it agreed to take on the 50 percent stake in the venture held by Alfa-Acess-Renova, the Russian side of the joint venture, for $28 billion, subject to the terms of a definitive agreement.
Russian President Vladimir Putin expressed support for the deal in September when he met with BP Chief Executive Officer Bob Dudley. Dudley was the top executive at TNK-BP before leaving in 2008. The Russian side of the joint venture had claimed he was favoring British interests in his position.