Rosneft changes tack on TNK-BP minority buyout offer Rosneft chairman Igor Sechin has offered to buyout the minority shareholders of TNK-BP, six months after the Russian oil group closed a deal to buy out BP and its oligarch partners out of the group. While Mr Sechin had long insisted that Rosneft was "not a charity" and had no obligation to buy out TNK-BP minorities under Russian law, on Friday he appeared to change course. In a public exchange with Russia's prime minister Dmitry Medvedev, Mr Sechin said Rosneft's board would consider a buyout of minorities. Mr Sechin said Rosneft would offer to buy out the TNK-BP minority investors at a price set at an 18-month weighted average of the stock. That price reflects a 20 to 30 per cent premium to the last closing price. However, the stock has fallen more than 40 per cent since Rosneft bought out TNK-BP's main shareholders in March. Shares in RN Holding, the successor to TNK-BP, rose as much as 18 per cent on the news, while Rosneft gained 0.8 per cent. At the present price, the minority shareholders" combined stake is worth about $1.4bn. Mr Sechin made the announcement in a publicly staged exchange with Mr Medvedev in Sochi. Warning that Russia faced an economic "abyss" if it did not push through serious market reforms, Mr Medvedev urged Rosneft to improve corporate governance. A state company can give an example of the right way to treat minorities. This will improve the investment climate," he said. Mr Sechin responded: "Given your concerns and your decision, I think that the company will voluntarily accommodate your request, despite having no legal obligation to do so." Russian law does not require companies to buyout minority shareholders if it is buying out the controlling shareholders and not the listed entity itself. However, Mr Sechin's repeated refusal to do so soured investors on both the company and Russia's corporate governance despite other investor-friendly initiatives by the state group, such as the nomination of former Morgan Stanley, ExxonMobil and BP executives to its board. TNK-BP minority investors, who own about 5 per cent of RN's stock, said they were pleased Mr Sechin had finally been willing to make a buyout offer but hoped that Rosneft would eventually agree to offer a higher premium to the share price. We're seeing an offer which is decent. It's not great but it's better than nothing," said Jacob Grapengiesser, a partner at East Capital, the investment fund. Is this the end of the story? But it's a leap in the right direction. The news of the potential minority buyout came as Rosneft completed a separate deal to acquire $1.4bn worth of oil and gas assets from state-owned diamond producer Alrosa. Alrosa, the world's largest diamond producer by volume, is gradually selling non-core assets and preparing for a public offering as part of the Russian government's privatisation programme. The company is expected to announce the offering as soon as next week.