LONDON--BP PLC (BP.LN) said Monday it has agreed to sell its 50% stake in Russian oil company TNK-BP Ltd. (>> TNK-BP Holding OAO) to state-backed giant OAO Rosneft (>> Rosneft' NK OAO) for $17.1 billion in cash plus shares representing 12.84% of the Russian company.<br /><br />Under the terms of the transaction, BP will use $4.8 billion of the cash it receives for its TNK-BP stake to purchase an additional 5.66% of shares in Rosneft, to take its total stake up to 19.75%, it said in a statement. After acquiring those shares, BP will have gained $12.3 billion in cash from the transaction, it said.<br /><br />The deal marks a historic shift in BP's presence in the key Russian oil market, freeing it from a turbulent joint venture with a group of Soviet-born billionaires and potentially giving it access to Arctic oil exploration rights that are widely coveted by companies seeking to replace dwindling oil resources elsewhere.<br /><br />BP will get two seats on Rosneft's nine-person board as part of the deal and expects to be able to account for its share of Rosneft's earnings, production and reserves on an equity basis.<br /><br />The signing of the definitive agreements is conditional on the Russian government agreeing to the sale of the 5.66% stake in Rosneft and it is intended that the TNK-BP sale and this further investment in Rosneft would complete on the same day, BP said in a statement.
