TNK-BP Profits Tumble on Tax and Export Charges

The main unit of TNK-BP, which is being acquired by Russia's state owned oil company Rosneft, posted a sharp fall in profits following increased tax and export duty charges.

TNK-BP International's full year net income for last year, fell by 13 percent to $7.58bn, after an increase in export duties, other taxes and a one-off impairment took its toll on the company's balance sheet.

Earnings before interest, taxes, depreciation and Amortisation came in 7 percent lower than the full year of 2011, at $13.35bn.

However, the unit reported 2012 operation cashe flow rising to $13.24bn from $10.85bn in 2011.

TNK-BP International added that it had replaced 210 percent of its reserves in 2012 under a US regulation, the US Securities and Exchange Commission's Life of Field standards.

Rosneft is waiting for regulatory approval over wits proposed takeover of the group's parent company TNK-BP.

In October last year, Rosneft got one step closer to becoming the world's biggest oil company, after reaching a $55bn deal with equal shareholder holders BP and a consortium of Russian billionare investors, known as AAR.

The deal means that BP and AAR will each sell their 50 percent share in a joint venture to Rosneft in return for cash and shares.

BP is tipped to receive $17.1bn cash and a 12.84 percent stake in Rosneft, enabling BP to continue to share in Russia's vast energy resources.

BP has agreed to eventually use some of the cash to buy further Rosneft shares, taking its stake to 19.75 percent.

This deal has the blessing of the Russian President Vladimir Putin, who said state-controlled Rosneft had made a good deal at a good price: "This is a good, large deal that is necessary, not only for the Russian energy sector but also the entire economy."