TNK-BP Disposal May Put BP's Dividend in the Spotlight

LONDON -- The shares of BP (ISE: BP.L) (NYS: BP) fell 3 pence to 448 pence in early trading this morning after the FTSE 100 oil group confirmed it was in "advanced discussions" to sell its 50% stake in TNK-BP to Rosneft.

Weekend reports suggested BP's board had already agreed a $27 billion deal to sell the company's half of the Russian joint venture.

According to Reuters and the Financial Times, BP is expected to receive about $13 billion in cash alongside a 19% stake in Rosneft, which would be worth about $14 billion at the Russian oil group's current share price.

TNK-BP, currently Russia's third-largest oil producer, was established in 2003 when BP merged its Russian assets with those of Alfa Access Renova, a consortium representing the oil interests of various Russian tycoons. Rosneft, which is majority-owned by the Russian government, is seeking to acquire AAR's half of TNK-BP as well.

Announcements confirming the future of TNK-BP could be made later this week, according to reports today.

BP's relationship with AAR has not been easy, with current BP boss Bob Dudley, then chief executive of TNK-BP, claiming to have faced "sustainedharassment" from the Russian authorities during 2008. In addition, an attempt by BP to sell its TNK-BP stake last year was blocked by AAR.

BP's proposed TNK-BP sale follows numerous other disposal announcements from the FTSE 100 group that, since the start of 2010, have totaled some $35 billion.

The sale of the TNK-BP stake could put BP's cash flow and dividend in the spotlight. During 2011, BP's finances were boosted by a $3.7 billion dividend from TNK-BP, and the FTSE major collected a further $14 billion from the joint venture between 2004 and 2010.

In contrast, a 19% stake in Rosneft would deliver a dividend of about $500 million a year, based on the Kremlin-backed firm's current 7.53 ruble per share payout.

BP's dividend currently runs at $0.08 per share per quarter, which will cost BP about $6 billion this year.

Right now, BP offers a 4.5% dividend yield and is just one of a number of FTSE large caps that offers an income well ahead of what you can expect to receive from a standard savings account.

If you are seeking other high-dividend opportunities, this special free report could assist your investment decisions.

"8 Top Dividend Plays Held By Britain's Super Investor" reveals the favorite income stocks held by Neil Woodford -- the City legend who has thrashed the FTSE 100 during the 15 years to 2011 by favoring dividend-paying blue chips.

Just click to download the free Neil Woodford report today. But hurry, this report will remain available for a limited time only.

Are you looking to profit as a long-term investor? "10 Steps To Making A Million In The Market" is the latest Motley Fool guide to help Britain invest. Better. We urge you to read the report today -- while it's still free and available.

Further Motley Fool investment opportunities:

The article TNK-BP Disposal May Put BP's Dividend in the Spotlight originally appeared on

Maynard Paton does not own any share mentioned in this article. The Motley Fool has adisclosure policy.
We Fools may not all hold the same opinions, but we all believe that
considering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.