• Monday, December 04, 2023
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Rosneft becomes world’s largest listed oil producer


Following the completion of deals worth around $55 billion to take over TNK-BP, Russian state oil giant Rosneft has become the world’s largest publicly traded oil producer accounting for around 5 per cent of global production, with BP Plc as a major shareholder.

The new company, created last Thursday, will be about 70 percent-owned by the Russian state and will employ 218,000 people, more than Exxon and Royal Dutch Shell Plc (RDSA) combined.

Rosneft sales per employee will be $729,000 this year, compared with more than $5 million at Shell, representing the scale of potential cost savings.

Until the Rosneft takeover of TNK-BP, Exxon was the largest publicly traded international oil and gas company.

Rosneft handed BP $16.7 billion in cash and 12.8 percent in Rosneft shares for the U.K. major’s 50 percent stake in TNK-BP, the companies said in a joint statement.

BP acquired 5.7 percent additional shares in Rosneft from state holding company Rosneftegaz for $4.9 billion. BP, which already owned a small stake in Rosneft, now owns nearly 20 percent of Rosneft.

Rosneft paid AAR (Alfa Access Renova), a group of tycoons who owned the other half of TNK-BP, $27.7 billion for their stake. Igor Sechin, Rosneft chief executive officer will chair a committee on the integration of Rosneft and TNK-BP. Mr. Dudley, who will also sit on the committee, has been nominated to Rosneft’s board.

Sechin plans to find $10 billion of efficiencies through the TNK-BP deal, according to a report on Bloomberg.

“We welcome BP as a strategic investor in Rosneft and look forward to their involvement in forming the future strategic direction of the company through its representation on the Rosneft board of directors,” Sechin said in the statement.

“We hope to help Rosneft to deliver synergies through its acquisition of TNK-BP and to grow production and reserves through brownfield, Greenfield and unconventional opportunities as Rosneft strengthens its position among the world’s leading global energy companies,” Bob Dudley said. BP and Rosneft intend to identify possible opportunities for projects in Russia and internationally, the companies said.