Russian oil company TNK-BP said yesterday it had agreed a deal with its part-owner BP to acquire the troubled British oil giant’s assets in Vietnam and Venezuela for $1.8 billion.
TNK-BP, Russia’s third-biggest oil company, is owned 50 per cent by BP and 50 per cent by a group of Russian billionaires including banking magnate Mikhail Fridman known collectively as Alfa Access-Renova.
The divestment is in line with a plan by BP to sell up to $30 billion (€21.2 billion) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.
“Today’s agreement is further evidence of the rapid progress BP is making towards the divestment target we set out in July,” BP’s new chief executive officer, Robert Dudley, said in a statement
Mr Dudley, who replaced Tony Hayward after the oil spill catastrophe, said that the acquisition would give TNK-BP a solid foundation to build its business outside Russia.
TNK-BP almost imploded during a venomous shareholder conflict between the co-owners in 2008 but the dispute was patched up when shareholders agreed to appoint Maxim Barsky as chief executive effective from January 1, 2011, with Mr Fridman taking the reins in the interim.
Ironically, Mr Dudley was ousted as TNK-BP chief executive at the height of the conflict. With relations now smooth, Mr Hayward has been nominated as non-executive director at TNK-BP after his departure from BP.
TNK-BP, which operates huge oil fields in Siberia and accounts for 16 per cent of Russian production, has long been considered one of BP’s crown jewels.
“The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP’s strategic expansion in the global energy market,” said Mr Fridman, who is serving as acting chief executive of the company, in a TNK-BP statement.
TNK-BP said a deposit of $1 billion will be made by October 29 with final payment upon completion.
“Subject to government ap-provals and the fulfilment of other agreed pre-closing conditions, the companies expect the transaction to be completed in the first half of 2011.”
According to the terms of the agreements in Venezuela, TNK-BP will acquire from BP a 16.7 per cent equity stake in the PetroMonagas SA extra heavy oil producer, a 40 per cent stake in Petroperija SA which operates the DZO field, and a 26.7 per cent stake in Boqueron SA.
The deal comes after Russian and Venezuela on Friday signed a memorandum of understanding supporting the acquistion, at a cememony in the Kremlin attended by Venezuelan President Hugo Chavez and Russia’s Dmitry Medvedev.
In Vietnam, TNK-BP will acquire from BP a 35 per cent stake in an upstream offshore gas production block containing the Lan Tay and Lan Do gas condensate fields, a 32.7 per cent stake in the Nam Con Son Pipeline and Terminal, and a 33.3 per cent stake in the Phu My 3 power plant.
The acquisitions of the assets in Venezuela and Vietnam will bring TNK-BP net proved and probable reserves of 290 million barrels of oil equivalent, it said.
TNK-BP has also expressed interest in acquiring BP’s assets in Algeria and the issue was discussed earlier this month during a visit by Mr Medvedev to the North African country.