LONDON: Rosneft gobbled up BP's highly-profitable Russian joint venture, transforming itself into a top player in the global oil sector in a $61 billion (47 billion-euro) deal yesterday that gives the BP nearly a fifth of the Russian energy giant and ensures access to key Arctic resources.
British BP said in a statement that it has agreed to sell its half of Russian venture TNK-BP to Rosneft for $17.1 billion and another 12.84 percent share in the state firm.
BP added it would spend $4.8 billion of the proceeds to buy another 5.66 percent of Rosneft from the Russian government, bringing its total stake in the Russian company to 19.75 percent. BP currently owns 1.25 percent of Rosneft.
The shake-up has major implications for the exploration of oil and gas in the vast Arctic region, while helping to firm up BP's plans to refocus its attention away from the United States after the 2010 oil spill disaster.
It also effectively ends the often tumultuous but highly profitable TNK-BP joint venture. In Moscow, Rosneft announced it had also bought the other 50-percent in TNK-BP from key Russian investors for $28 billion.
Rosneft Chief Executive Igor Sechin estimated the total value of the deal at $61 billion.
Russian President Vladimir Putin hailed the transaction.
"This is a good, large deal that is necessary not only for the Russian energy sector but also the entire economy," news agencies quoted Putin as saying. "This is a very good signal to the Russian and international energy markets."
BP will pay the Russian government $8 per Rosneft share, representing a premium of 12 percent to the closing price last Thursday.
Under the terms of the agreement, BP would also have two seats on Rosneft's nine-person board. Subject to regulatory approvals, the transactions are expected to complete during the first half of 2013.
"BP today announced that it has signed heads of terms to sell its 50 percent share in TNK-BP to Rosneft," the statement said.
"Signing of the definitive agreements is conditional on the Russian government agreeing to the sale of the 5.66 percent stake in Rosneft and it is intended that the TNK-BP sale and this further investment in Rosneft would complete on the same day.
"Therefore, on completion of the proposed transaction, BP would acquire a total 18.5 percent stake in Rosneft and net $12.3 billion in cash.
"This would result in BP holding 19.75 percent of Rosneft stock, when aggregated with BP's 1.25 percent current holding in Rosneft."
BP Chief Executive Bob Dudley said the deal "builds on BP's track record of value creation in Russia. It is consistent with our strategy of deepening our positions in the world's most prolific oil and gas regions.
"BP intends to be a long term investor in Rosneft — an investment which I believe will deliver value for our shareholders over the next decade and beyond."
The deal will catapult Rosneft into becoming the world's biggest publicly-traded oil company and second in size only to Saudi Arabia's Aramco.
The deal will give Rosneft a daily output of 3.15 million barrels — far higher than current leader ExxonMobil, which pumps out 2.3 million barrels a day.
The deal should relieve tensions at one of Russia's most profitable oil companies — a venture BP launched in 2003 to expand its presence in a country with the world's biggest oil and natural gas output.
TNK-BP has generated tens of billions of dollars and was responsible for more than a quarter of BP's crude output last year.
However, tensions reached breaking point over BP's efforts early in 2011 to strike a separate Arctic oil tie-up with Rosneft.
That Arctic deal was blocked by the BP's Russian partners in TNK-BP in a shock move which only worsened their relations with both Rosneft and BP still further.
Rosneft buys out TNK-BP in $ 61 billion deal
Rosneft buys out TNK-BP in $ 61 billion deal
Kuwait Fund for Development: Six decades of humanitarian and developmental impact across globe
On Dec. 31, the Kuwait Fund for Development marks the anniversary of its establishment, opening a new chapter of success and ambition as one of the most prominent pioneers of development on both regional and global levels. Founded in 1961, the fund became the first and oldest development institution to operate in Arab countries and other developing nations.
Today, after more than six decades of continuous work, the Kuwait Fund for Development remains steadfast in its mission and has never ceased its efforts to support development causes in developing countries. As it celebrates its 64th anniversary, the fund has drawn a national portrait under the theme “Partners in Development,” reflected through its projects spread across the globe, all of which aim to build brighter and more sustainable future.
An external development arm
The establishment of the Kuwait Fund for Development embodied a wise and visionary decision by the leadership of Kuwait at the time. Kuwait was the only developing country that chose to share the challenges of development with other developing nations, cooperating with them through the provision of concessional loans, grants, financial assistance, and technical support tailored to their development priorities.
Since its inception, the Kuwait Fund for Development has served as Kuwait’s external development arm, sparing no effort in supporting development causes and extending assistance to developing countries worldwide.
Vision and early beginnings
In the early 1960s, the late Amir Sheikh Jaber Al-Ahmad Al-Sabah, then head of the financial department, proposed the idea of establishing a development entity that would serve Kuwait’s foreign policy and assist Arab and other developing countries in achieving development across various sectors. The idea received strong support from the late Amir Sheikh Abdullah Al-Salem Al-Sabah, as it aligned with Kuwait’s vision at the time to build a modern state.
Consequently, an Amiri decree was issued on Dec. 31, 1961, establishing the Kuwait Fund for Development with an initial capital of 50 million Kuwaiti dinars ($162.6 million).
Global reach and development impact
The fund’s activities have extended to all corners of the world, contributing to the financing of projects in 106 countries, including 16 Arab countries, 41 African countries, 19 in East and South Asia and the Pacific, 17 in Central Asia and Europe, and 12 in Latin America and the Caribbean.
This support was delivered through 1,037 concessional loans provided to the governments of these countries, with a total value of approximately 7 billion Kuwaiti dinars. In addition, the fund has provided grants and technical assistance to support a wide range of development services, helping beneficiary countries implement their development programs. A total of 420 grants and technical assistance operations were extended, amounting to approximately 401 million Kuwaiti dinars.
Loan agreements
During the past year, the Kuwait Fund for Development signed several loan agreements supporting development across different regions of the world. Among these were two loan agreements with the government of Bahrain. The first loan, valued at 31.25 million Kuwaiti dinars, contributed to financing the Electricity Transmission Networks Development Project. The second loan, valued at 10 million Kuwaiti dinars, supported the Sheikh Jaber Al-Ahmad Al-Sabah Highway Development Project (Phase II).
On the sidelines of the World Bank Group meetings held in Washington, D.C., the fund has also signed a 4 million Kuwaiti dinar-worth loan agreement with Saint Lucia to help finance the Sir Julian R. Hunte Highway Project, as well as another 4 million Kuwaiti dinar-worth loan agreement with Belize to support the George Price Highway Project.
Supporting and assisting refugees
The Kuwait Fund for Development’s contributions to humanitarian action stand out at both regional and international levels. Since its establishment, the fund has represented a unique model in supporting and assisting refugees in countries affected by disasters, conflicts, and wars, in line with Kuwait’s moderate and balanced policy.
These efforts have helped strengthen Kuwait’s relations with Arab and international partners. The fund has played a significant role in the reconstruction of Lebanon and Iraq following periods of crisis, and its assistance to the Palestinian people has never ceased.
International Participation
Over the past year, the Kuwait Fund for Development recorded notable participations in major international forums. These included taking part in the 2025 annual meetings of the World Bank Group and the International Monetary Fund in Washington, D.C., with a delegation headed by the fund’s Acting Director General Walid Shamlan Al-Bahar. The fund also took part in the Tokyo International Conference on African Development, held in Tokyo, Japan.
Additional international engagements included participation in the Third UN Conference on Landlocked Developing Countries, held in Awaza, Turkmenistan, and the Fourth International Conference on Financing for Development, organized by the UN in Seville, Spain.
