Russia to finalize large-scale oil deal

MOSCOW - Russian President Vladimir Putin has ordered the government to prepare documents needed to finalize the TNK-BP and Rosneft purchase deal, Rosneft CEO said Tuesday.

"Yesterday I told the president about the first stage of these deals and he gave the corresponding orders to the head of the government (Prime Minister Dmitry Medvedev)," said Rosneft head Igor Sechin in a telephone news briefing.

Rosneft's eventual benefits from the deal could amount to $3 to $5 billion dollars, according to Sechin.

The oil giant buys out 100 percent of the TNK-BP from its two owners, the British Petroleum (BP) and the Russian group Alfa- Access-Renova (AAR) for $61 billion, the company said on Monday.

Rosneft would pay BP $17.1 billion upfront and also convey to the British partner 12.84 percent of Rosneft's shares. It will buy AAR's shares for $28 billion, the company said.

Sechin told local media Rosneft was planning to pay dividends not exceeding 25 percent of the profit.

These words immediately knocked the TNK-BP shares down on the Moscow stock exchange, while Rosneft's shares rose to their maximum since March.

Also Tuesday, Russian Federal Anti-Trust Service (FAS) warned that the acquisition of TNK-BP would limit options for Rosneft to purchase more assets in the future.

"If (Rosneft's) market share would exceed 50 percent, we'll protest, but so far it is within 35-50 percent," Interfax news agency quoted the FAS head Igor Artemyev as saying.

Last week, Russian Energy minister Alexander Noval said the government saw no treat of the fuel market monopolization after Rosneft acquires TNK-BP.

After acquiring 100 percent of the TNK-BP, Rosneft will become the world's largest publicly traded oil company with annual production amounting to 200 million tons, while the country as a whole produced 517 million tons of crude oil in 2012, according to Russia's Energy Ministry.

Rosneft is a leading company of Russia's petroleum industry, ranking among the world's top publicly traded energy companies. The Russian government holds over 75 percent of shares in the company.

The TNK-BP is a leading Russian oil company formed in 2003. It is among the top 10 privately-owned oil companies in the world in terms of crude oil production, whose upstream operations are located primarily in Siberia and the Orenburg region.