PM Medvedev Says Corrections in TNK-BP Deal Possible

Oil Well file photo

MOSCOW, November 29 (RIA Novosti) – Russian Prime Minister Dmitry Medvedev said corrections are possible in the recently inked deal on the purchase of Russia’s third largest crude producer TNK-BP.

Russia’s largest oil company Rosneft announced in October it had reached agreements to buy 100 percent of TNK-BP from British oil major BP and the AAR consortium of Russian billionaire shareholders.

“Technically, parameters of the TNK-BP deal may be corrected considering the [changeable] market situation,” Medvedev said in an interview with Kommersant business daily, but did not specify the type of corrections.

“But on the whole, the main provisions of the deal should be preserved, if we are not considering force majeure scenarios. This is the issue of an agreement between the seller and the buyer,” Medvedev said.

Under the terms of the deal, Rosneft will buy the whole of TNK-BP for $45.1 billion in cash and 12.84 percent of its stock.

BP will receive $17.1 billion in cash for its 50 percent stake plus stock representing 12.84 percent of Rosneft’s shares, while the AAR consortium of Russian billionaire shareholders will sell its 50 percent stake in the joint venture “for cash consideration of $28 billion.”

Rosneft signed a definitive agreement with BP on acquiring the British oil major’s 50 percent interest last week while the deal with AAR is at an advanced stage. The TNK-BP deal is expected to be closed in the first half of 2013.