BP agrees $26bn deal with Rosneft BP announced it had agreed to sell its stake in its Russian joint venture TNK-BP to the Russian national energy champion Rosneft for about $26bn, in a cash-and-shares deal that sets the UK oil group on a new course in Russia. Under the agreement, BP would acquire an 18.5 per cent stake in Rosneft and net $12.3bn in cash in exchange for its half of TNK-BP. It would leave BP as the second largest shareholder in Rosneft after the Russian government, and give it two seats on the Russian company's nine-person board. Rosneft will also acquire the half of TNK-BP owned by BP's partners, a consortium of Soviet-born oligarchs known as AAR for $28bn. Russian president Vladimir Putin officially blessed a full takeover of the company by Rosneft on Monday during a meeting with Igor Sechin, Rosneft chief executive. The agreement marks a turning point for BP in Russia, long one of its core areas. It will finally end the company's involvement with TNK-BP, a joint venture that has proven highly lucrative but which has been plagued by bitter disputes between the two partners. Carl-Henric Svanberg, BP chairman, said in a statement: "This is an important day for BP. Russia is vital to world energy security and will be increasingly significant in years to come. He said TNK-BP had been a "good investment" for BP but the company was now "laying a new foundation for our work in Russia." Bob Dudley, chief executive, said BP intended 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 agreement is a vindication for Mr Dudley, who saw a proposed share swap and Arctic exploration deal with Rosneft collapse last year due to opposition from AAR, the vehicle through which the oligarchs own their 50 per cent stake in TNK-BP. BP said Rosneft would pay the UK oil group $17.1bn in cash and in shares representing 12.84 per cent of the company. BP would then use $4.8bn of the cash to purchase a further 5.66 per cent of Rosneft from the Russian government, at a price of $8 a share. On completion of the transaction, BP would hold 19.75 per cent of Rosneft shares, including its existing holding of 1.25 per cent, and have received $12.3bn in cash, the company said. BP added that the signing of the definitive agreements was conditional on the Russian government agreeing to the sale of the 5.66 per cent stake in Rosneft, and the intention was to complete the TNK-BP sale and the further investment in Rosneft on the same day. It said the proposed deal was a "class 2" transaction under UK Listing Rules, meaning it did not require BP shareholder approval. BP said it was advised on the agreement by Morgan Stanley, UBS, Goldman Sachs, Lambert Energy Advisory and Renaissance Capital, while Credit Suisse provided a fairness opinion to BP's board. Linklaters acted as principal legal adviser on the transaction. Rosneft was advised by Bank of America Merrill Lynch and Citi.