David Peattie, BP's head of Russia, said it would mull several options, not limited to share buybacks, and would seek the views of shareholders. A BP spokesman said: "The board has made no decision on the return of cash to shareholders following this transaction. Those decisions will be made once the deal is completed early next year."
Chairman Carl-Henric Svanberg said yesterday's deal would "deliver both cash and long term value for BP and its shareholders" and provide BP with "a sustainable stake in Russia's energy future".
BP will initially trade its 50pc stake in TNK-BP for $17.1bn in cash and shares representing 12.84pc of Rosneft - worth $9.7bn based on the closing price at the bid date. It will then immediately reinvest $4.8bn of the cash proceeds into purchasing a further 5.66pc of Rosneft shares from the Russian government - acquiring a total of 18.5pc of Rosneft shares. It already owns 1.25pc.
The British company will buy the shares from the Russian government at a 12pc premium to the Rosneft closing share price on the bid date. One insider said this represented a good deal for Rosneft, adding "normally an equity stake would have a heavy discount".
BP, which was advised by Morgan Stanley on the deal, saw its shares fall 1.5pc amid continued concern about risks if relations with Russia were to sour.
One top-10 investor said: "The truth is that BP is only ever going to be as influential as Rosneft allows it to be - and claiming anything different is delusional. While relations are rosy, everything will work well. But what hope does BP have if it has a disagreement with the Kremlin?"
BP hopes to wield influence through its board seats. These positions, and its near-20pc stake, mean it will be able to book its equity stake of Rosneft's reserves and production in its accounts, keeping them at levels similar to those prior to the sale.
BP first attempted a tie-up with Rosneft last year but was thwarted by legal action from AAR. It is understood BP has some protection against legal action from AAR built into its agreement with Rosneft. Rosneft was advised by Bank of America Merrill Lynch and Citigroup.
Chairman Carl-Henric Svanberg said yesterday's deal would "deliver both cash and long term value for BP and its shareholders" and provide BP with "a sustainable stake in Russia's energy future".
BP will initially trade its 50pc stake in TNK-BP for $17.1bn in cash and shares representing 12.84pc of Rosneft - worth $9.7bn based on the closing price at the bid date. It will then immediately reinvest $4.8bn of the cash proceeds into purchasing a further 5.66pc of Rosneft shares from the Russian government - acquiring a total of 18.5pc of Rosneft shares. It already owns 1.25pc.
The British company will buy the shares from the Russian government at a 12pc premium to the Rosneft closing share price on the bid date. One insider said this represented a good deal for Rosneft, adding "normally an equity stake would have a heavy discount".
BP, which was advised by Morgan Stanley on the deal, saw its shares fall 1.5pc amid continued concern about risks if relations with Russia were to sour.
One top-10 investor said: "The truth is that BP is only ever going to be as influential as Rosneft allows it to be - and claiming anything different is delusional. While relations are rosy, everything will work well. But what hope does BP have if it has a disagreement with the Kremlin?"
BP hopes to wield influence through its board seats. These positions, and its near-20pc stake, mean it will be able to book its equity stake of Rosneft's reserves and production in its accounts, keeping them at levels similar to those prior to the sale.
BP first attempted a tie-up with Rosneft last year but was thwarted by legal action from AAR. It is understood BP has some protection against legal action from AAR built into its agreement with Rosneft. Rosneft was advised by Bank of America Merrill Lynch and Citigroup.