BP-TNK deal okayed by Russia

Debra Beachy, Petroleum News contributing writer

The Russian government has approved a $6.15 billion joint venture between BP and the Tyumen Oil Co. that will be the country’s third largest producer, a BP spokesman confirmed on Aug. 27.

The Russian Anti-Monopoly Ministry said in Moscow on Aug. 26 that it had approved the deal, announced in February. The new company, TNK-BP, brings together TNK and Sidanco. BP would own half and its Russian partners, the Alpha Group and Recess-Renova, would own the other half. The new company would have 5.2 billion barrels of oil and gas reserves, and produce about 1.2 million barrels of oil a day, BP said. It would also own significant exploration interests in Siberia and Sakhalin, together with major downstream businesses that include interests in five refineries and a retail network of more than 2,100 sites in Russia and the Ukraine.

For its 50 percent stake, BP is to pay $3 billion in cash on completion of the deal and $1.25 million in BP shares, to be paid over three years in installments.