Russia's Rosneft has overtaken ExxonMobil as the world's biggest oil company as a result of its latest deal.
Rosneft's HQ nameplate reflects the Moscow skyline Image: Rosneft |
Rosneft's acquisition of TNK-BP at the end of March concluded with the state-owned Russian company taking a 50% interest in the energy conglomerate, in exchange for $16.7bn in cash and 12.8% of Rosneft shares.
In return, BP will receive a net payment of $12.5 billion in cash, including a TNK-BP dividend of close to $1bn and an 18.5% stake in Rosneft.
In a separate part of the deal, Rosneft paid $27.7bn in cash to the consortium of Russian billionaires who formed the venture investment firm called Alfa Access Renova (AAR).
Most importantly, both of the energy giants will gain enormous benefits from the deal. Having now overtaken US rival, ExxonMobil, to become the world’s largest producer and reserve holder of oil and gas combined, Rosneft will also apply BP's new technologies and techniques to further increase production and reserves.
Meanwhile, BP will gain a more secure position in Russian energy than it had with AAR, along with access to the oil-rich Arctic region. The company will also be able to comfortably finance its outstanding legal fees from the Deepwater Horizon disaster.