BP first opened its representative office in Moscow in 1990.
First BP branded retail station was opened in 1996 in Moscow. Currently BP branded retail network consists of 122 retail sites in Moscow and Moscow region, in Saint Petersburg and Pskov, in Tver, Smolensk, and Novgorod regions and is operated by Rosneft under license agreement with BP.
In 1997, BP purchased a 10 per cent stake in Sidanco, then Russia’s 4th largest oil company. The stake was subsequently increased to 25 per cent plus one share in 2002.
In 1998 we formed an alliance with Rosneft to explore for oil and gas in Sakhalin. This was the Sakhalin V project, and the first Rosneft-BP joint project. We conducted an extensive seismic program, drilled several wells and made some discoveries. Unfortunately, we did not find commercial reserves which would have allowed us to proceed to the next stage of development and ultimately BP decided to leave the project. But we did gain valuable experience working together in a remote and technically challenging region.
In 2006 BP took strategic decision to participate in the Rosneft IPO (initial public offering), investing 1 billion US dollars in Rosneft and becoming a 1.25% shareholder of the company.
In 2003, BP merged its interests in Russia with those of TNK to create TNK-BP, a successful joint venture employing around 50,000 people and operating in nearly all of Russia’s major hydrocarbon regions.
TNK-BP went on to become Russia’s third biggest vertically integrated oil and gas company, generating more than $55 billion of net profit in 2003 - 2012. TNK-BP’s production rose by over 40% in nine years and proved SEC reserves grew by more than 30% from end 2003 to end 2012. Over the history of TNK-BP, the joint venture generated around $19 billion of net dividends for BP's shareholders, while paying more than $190 billion in taxes and duties to the Russian Federation.
On 1 June 2012, BP announced its intention to pursue a sale of its shareholding in TNK-BP. Almost five months later, on 22 October 2012, BP signed Heads of Terms to sell its 50 per cent share in TNK-BP to Rosneft.
On the 22nd of November 2012 the Russian Federation approved BP’s acquisition of 5.66% of Rosneft from the Russian state. On the same day, BP signed binding Sales and Purchase Agreements with Rosneftegaz and Rosneft for the sale of BP’s 50 per cent interest in TNK-BP to Rosneft and BP’s acquisition of additional shares in Rosneft.
The deal was completed on 21 March 2013. BP received cash (approximately $12.5 billion) and shares (18.5% of Rosneft) in consideration for its 50% stake in TNK-BP. This resulted in BP holding 19.75 per cent of Rosneft stock, when aggregated with BP’s 1.25 per cent pre-deal holding.