16°c Partly cloudy
22°c Thundershowers
The Canadian Press - ONLINE EDITION
Oil company BP announces share buyback with total value of $8 billion
LONDON - Oil company BP said Friday it will buy back $8 billion of shares using money it earned by selling its stake in Russian producer TNK-BP.
The announcement came after BP completed the sale of its 50 per cent interest in TNK-BP to Moscow-based Rosneft, in a deal that gave it $12.5 billion pounds in cash and a stake in the state-owned oil company. The deal allowed Rosneft, the Russian oil giant, to tighten its grip on the country's lucrative oil industry.
"We expect our stake in Rosneft will generate long-term value for BP and its shareholders," said BP Chairman Carl-Henric Svanberg. "But this buy-back program should also allow our shareholders to see benefits in the near-term from the value we have realized by reshaping our Russian business."
BP shares rose 2.8 per cent Friday to 461.80.
BP invested $8 billion in cash, shares and assets when it formed TNK-BP in 2003 and received a total of $19 billion in dividends over the next decade. The sale of BP's stake in TNK-BP pushed the British company's stake in Rosneft to 19.75 per cent, making it the firm's biggest private shareholder.
The deal allowed Rosneft, already the country's top oil producer, to increase its global profile and become the world's largest publicly traded producer of oil and gas, in terms of output. It pushed past ExxonMobil, whose daily output at 4.2 million barrels of oil was below the expanded Rosneft's projected 4.6 million at the time of the deal.
Rosneft was created out of the former Soviet state oil and gas authority in 1993 and expanded over the past decade as the government increased its control over Russia's oil industry. The company is 75 per cent owned by the government, with the remaining shares traded on the market or owned by the company and its managers.
"BP is moving on to the next phase of its business in Russia, becoming the largest private shareholder in Rosneft, Russia's leading oil company," Chief Executive Robert Dudley said. "In the process we have also released cash equivalent to at least six years of BP's anticipated future dividends from TNK-BP."
The buy-back is expected to take between 12 and 18 months to complete.
BP intends to keep $4.48 billion received from the sale of its interest in TNK-BP to reduce debt.
More Business
- Back to Top
- Return to Business
More Business
(1 of 18 articles for today)
Contractor tech support wins at VentureChallenge
5:53 AM 0
Poll
Most Popular Business
- Consumers buy new, cheaper cameras instead of fixing existing ones
- Shark Club opens in citiplace
- Hudson's Bay says it's not just a retailer, but a hangout for shoppers
- Prairie Pulp & Paper gets foothold in U.S.
- McMunn & Yates absorbs five McDiarmid locations
- Bank of Canada will raise overnight interest rate in July 2014: BMO economist
- Daycare-subsidy rules bad for business
- Mountain Equipment Co-op unveils new logo, name to appeal to urban customers
- Men's Wearhouse fires chairman who told millions 'You're going to like the way you look'
- Carriers turned off by Canada's wireless law
- Shark Club opens in citiplace
- McMunn & Yates absorbs five McDiarmid locations
- Consumers buy new, cheaper cameras instead of fixing existing ones
- Daycare-subsidy rules bad for business
- St. Vital Centre's energy savings help managers snag BOMA awards
- Toronto condo market poses economic risk to Canada
- Aircraft maintenance engineer taking off
- Google unveils Internet beaming balloons launched into stratosphere
- Cutting edge, made-in-Manitoba tech finds buyer -- in Manitoba
- MTS, Rogers extend LTE deal
- New owner for lumber stores
- Earls Pembina says goodbye after 18 years
- Sobeys expanding reach in Western Canada with Safeway acquisition
- Grove Pub to take over former home of Papa George's
- New rules let customers cancel phone contracts without penalty after two years
- Shark Club opens in citiplace
- McMunn & Yates absorbs five McDiarmid locations
- MTS to sell Allstream to Egyptian investment group, focus on Manitoba market
- Where is easy street? Survey of city's richest routes may surprise
- Custom-made suits no longer just for the ultra-wealthy
- Prairie Pulp & Paper gets foothold in U.S.
- Consumers buy new, cheaper cameras instead of fixing existing ones
- McMunn & Yates absorbs five McDiarmid locations
- Shark Club opens in citiplace
- Albertans look to U.S. for pipelines counsel
- Balancing today with tomorrow
- The $2-million question
- AP Exclusive: Inspections show more Bangladesh garment factories poorly planned and built
- Toronto condo market poses economic risk to Canada
- Accounting merger adds and subtracts
- McMunn & Yates absorbs five McDiarmid locations
- Prairie Pulp & Paper gets foothold in U.S.
- Consumers buy new, cheaper cameras instead of fixing existing ones
- Toronto condo market poses economic risk to Canada
- Cutting edge, made-in-Manitoba tech finds buyer -- in Manitoba
- Sobeys expanding reach in Western Canada with Safeway acquisition
- Accounting merger adds and subtracts
- Google unveils Internet beaming balloons launched into stratosphere
- Warren Buffett -- Winnipeg-style
- Daycare-subsidy rules bad for business
- New owner for lumber stores
- Snowbirds: It's that time of year again
- Sobeys expanding reach in Western Canada with Safeway acquisition
- Custom-made suits no longer just for the ultra-wealthy
- New rules let customers cancel phone contracts without penalty after two years
- Where is easy street? Survey of city's richest routes may surprise
- Value Partners cracks $1-B mark in assets
- McMunn & Yates absorbs five McDiarmid locations
- MTS to sell Allstream to Egyptian investment group, focus on Manitoba market
- Manitoba Movers
Ads by Google
You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.
You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.
Have Your Say
New to commenting? Check out our Frequently Asked Questions.
Have Your Say
Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?
Login SubscribeHave Your Say
Comments are open to Winnipeg Free Press Subscribers only. why?
SubscribeThe Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.