British energy giant BP has said it would repurchase a huge number of its shares after completing the sell-off of its interest in a joint Russian venture. The buyback is intended to make investors benefit from the deal.
The share buyback program would return about $8 billion (6.2 billion euros) to its shareholders, who would benefit through rising share prices in the wake of fewer shares in the markets, BP announced Friday.
"The program is expected to return to BP shareholders an amount equivalent to the value of the company's original investment in TNK-BP," the energy group said in a statement.
In 2003, BP invested $8 billion in cash, shares and assets, forming the TNK-BP gas and oil joint venture with Russian partners. Friday's announcement came a day after the British company had completed the sale of its 50 percent interest in the venture to Russian state oil company Rosneft. The deal brought BP $12.48 billion in cash plus an 18.5 percent Rosneft stake which lifted its holding in the Russian firm to 19.75 percent.
BP Chairman Carl-Henric Svanberg said the buyback would give shareholders short-term benefits, but added that the company also expected their stake in Rosneft to generate long-term gains.
BP also said it would use about $4.5 billion to reduce its huge company debt, and to cover some of the costs in connection with the oil spill caused by its Deepwater Horizon platform in the Gulf of Mexico.
uhe/jlw (AP, AFP, Reuters)