BP board backs $27-bn sale of TNK-BP stake

The board of BP gave "strong support" to a deal that would sell its stake in TNK-BP to Russian state oil company Rosneft in a transaction worth $27 billion, The Financial Times reported on its website on Sunday, citing a source familiar with the matter.

The source said under the deal, BP would sell its 50 per cent stake in TNK-BP, Russia's third-largest oil company, for a combination of cash and shares.

The source also said BP will receive $11 billion to $13 billion in cash and a stake of between 15 per cent and 20 per cent in Rosneft, valued at $11 billion to $14.7 billion, based on Rosneft's $73.4 billion market capitalisation. That would leave BP as the second-largest shareholder in Rosneft after the Russian government.

BP would also receive the roughly 12.5 per cent of Rosneft shares that the company holds in treasury, including some Russian government shares held in a state investment vehicle, Rosneftegaz, the FT reported.