BP sells TNK-BP stake to Rosneft

British oil firm BP said Monday that it has agreed to sell its half of Russian venture TNK-BP to Rosneft for $17.1 billion (13.1 billion euros) and another 12.84 percent share in the state energy giant. The deal creates a top player in the global oil sector with big implications for Arctic exploration and effectively ends the often tumultuous TNK-BP joint venture. In Moscow, Rosneft announced it had also bought the other half-stake in TNK-BP from Russian investors. BP added in a statement that it would spend $4.8 billion of the proceeds to buy another 5.66 percent of Rosneft from the Russian government, bringing its total stake in the Russian company to 19.75 percent. BP currently owns 1.25 percent of Rosneft. Under the terms of the deal, BP would have two seats on Rosneft's nine-person board. "BP today announced that it has signed heads of terms to sell its 50 percent share in TNK-BP to Rosneft, the major Russian integrated oil and gas company," the statement added. "Signing of the definitive agreements is conditional on the Russian government agreeing to the sale of the 5.66 percent stake in Rosneft and it is intended that the TNK-BP sale and this further investment in Rosneft would complete on the same day. "Therefore, on completion of the proposed transaction, BP would acquire a total 18.5 percent stake in Rosneft and net $12.3 billion in cash. "This would result in BP holding 19.75 percent of Rosneft stock, when aggregated with BP's 1.25 percent current holding in Rosneft." BP chief executive Bob Dudley said the deal "builds on BP's track record of value creation in Russia. It is consistent with our strategy of deepening our positions in the world's most prolific oil and gas regions. "BP intends 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."