Russian oil producer Rosneft is to buy out minority shareholders of TNK-BP Holding for about $1.5 billion – above the market price but at a level that may disappoint some investors.

The deal was announced by the company yesterday after months of hard talks and repeated refusals to buy the shares, which sent jitters through the investor community and raised questions over corporate governance in Russia.

Minority shareholders own about five per cent of TNK-BP Holding, which was acquired by Rosneft along with its parent TNK-BP in a $55 billion takeover that created the world’s largest publicly traded oil company by output. Rosneft later renamed the unit RN-Holding.

Rosneft and its president had repeatedly said that the company had no obligation to buy the shares from minority stakeholders. Igor Sechin changed his tone on Friday, however, saying that the company would consider buying the shares with a 20 to 30 per cent premium to the current share price.

The offer may disappoint investors. Sources close to the minority shareholders have told Reuters that they think Rosneft should buy them out for $2.8 billion, based on what Rosneft paid for its majority stake in TNK-BP.

“Minority shareholders who accept the offer will receive just half of the price for their shares that the oligarchs and the big foreign major got for theirs,” Sberbank CIB analysts said in a note.

“The only shareholders who will benefit from this are speculators who bought the shares on the cheap during the long period of uncertainty –precisely the people whom Sechin said he wanted to punish.”

Rosneft plans to buy out holders of ordinary shares at 67 roubles ($2) per share and preferred shares at 55 roubles, the company said yesterday.

TNK-BP ordinary shares rose by almost six per cent in early trading yesterday to 63.8 roubles.