Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

British energy giant BP plc (BP - Analyst Report) and Russia’s state-operated oil company, OAO Rosneft, have finally closed their deal related to TNK-BP, ahead of schedule.

BP divested its 50% stake in TNK-BP in line with the terms announced in Oct 2012. BP was entitled to receive $17.12 billion in cash and shares, giving it a 12.84% equity stake in Rosneft. Second, the UK giant had planned to buy an additional 5.66% share in Rosneft from the Russian state with approval already granted. For this, BP was supposed to siphon $4.87 billion from the cash proceeds.

Subsequently, BP received a final amount of $16.65 billion from Rosneft after adjustments. This excluded a dividend of $0.71 billion received by BP in Dec 2012 from TNK-BP. In accordance with the deal, BP used $4.87 billion of the proceeds to acquire a 5.66% share in Rosneft from ROSNEFTEGAZ. Therefore, BP received a net amount of $12.48 billion after adjusting for a dividend of $0.71 billion received for TNK-BP as well as an 18.5% share in Rosneft.

As a result of these transactions, BP has raised its ownership in Rosneft to 19.75% taking into consideration its existing minority stake of 1.25% in the Russian company.

This deal makes Rosneft the world's biggest listed oil company in terms of market capitalization. BP, for its part, stands to gain essential access to hydrocarbon reserves in the remote Arctic belt of Russia. BP’s sale of TNK-BP’s stake has helped it in simplifying its operations in Russia via a major strategic shift. We note that BP is also busy in reshaping its portfolio through the divestiture of smaller non-core properties to help pay spill-related costs while holding onto potential big resources.

Since 1998, BP and Rosneft have worked together in the exploration of the offshore Sakhalin Island. The pair also shares 50:50 ownership in the joint venture entity – Ruhr Oel GMBH − that owns stakes in 530,000 barrels per day of refining capacity in Germany.

BP carries a Zacks Rank #3 (short-term Hold rating). However, there are other stocks in the energy sector, namely, Enerplus Corporation (ERF - Snapshot Report),  Range Resources Corporation and EPL Oil & Gas, Inc. (EPL - Snapshot Report) , which carry a Zacks Rank #1 (Strong Buy) and are expected to perform impressively over the next few months.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RAMBUS INC RMBS 12.36 +4.83%
BOFL HOLDING BOFI 85.10 +4.73%
DIXIE GROUP DXYN 15.33 +4.43%
DAIMLER AG DDAIF 92.96 +2.88%
ALLIANCE FIB AFOP 17.21 +2.75%