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* AAR gets $27.73 bln for its half of TNK-BP
* BP gets $12.48 bln, 19.75 pct Rosneft stake for its half
* Rosneft now a bigger oil producer than Exxon
* Transfers finalised during all-night session with Putin
* AAR partners plan new ventures in oil, telecoms
* BP confirms its cash is outside Russia
By Vladimir Soldatkin and Andrew Callus
MOSCOW/LONDON, March 21 (Reuters) - Russian state oilcompany Rosneft closed its deal to buy TNK-BP from UK-based BP and four tycoons on Thursday,releasing $40 billion cash to the sellers and becoming a biggeroil producer than Exxon Mobil.
The $55 billion deal, which also gives BP a near 20 percentstake in Rosneft, was announced last year after months of on-offnegotiations. It is the biggest in Russia's corporate history.
It tightens the government's grip on the energy sector andis a victory for Rosneft chief Igor Sechin, a close confidant ofRussian President Vladimir Putin, creating a business withannual production of about 4.6 million barrels of oilequivalent, more than Exxon Mobil, the world's No.1investor-owned company.
The deal gives Rosneft an expert international shareholderand extra oil output revenue it can put to work to exploreRussia's vast reserves and to replace ageing and depletingfields. It hopes to extract $10 billion a year of costs savings.
BP, selling one half of the business, gets some hard cash inthe bank that reduces its dependence on an uncertain future inthe country. It has promised some of the $12.3 billion toshareholders, and can set the rest against its multibilliondollar Gulf of Mexico oil spill liabilities.
Cash also goes to the private businessmen who owned theother half of TNK-BP to fund their international ambitions.
A BP spokesman confirmed that the company's cash was in thebank, and outside Russia. BP has made huge profits in its20-year history there, but where increasing state involvementhas hampered its business plans over the past decade.
TNK-BP was created in 2003 by a merger of BP's Russianoperations with those of the Alfa-Access-Renova (AAR) consortiumof four Soviet-born billionaires, some of whom will stay in theoil industry by setting up international investment business.
Thursday's deal has brought the state share in Russia's oilsector, the world's largest by output, to more than 50 percent.It has drawn criticism from some analysts and managers ofnon-state enterprises, who said it would hinder competition andproduction growth.
The acquisition closed three months ahead of its June 30deadline, as predicted in an exclusive Reuters story of Feb. 22.
"This is a historic day for BP in Russia," BP ChiefExecutive Robert Dudley said in a statement. "BP has invested inRussia for more than 20 years and for a decade we have beenRussia's largest foreign investor through our involvement withTNK-BP."
ALL-NIGHTER WITH PUTIN
Dudley finalised the massive and complex cash and stocktransfers in an all-night round-table session with Rosneft ChiefExecutive Igor Sechin, Russian President Vladimir Putin,attendant lawyers, and bankers from Bank of America MerrillLynch and CitiGroup, at Putin's official residence in Moscow.
Both Dudley and Sechin were in London for a news conferenceon Thursday evening at which Sechin, a close Putin confidant andformer deputy prime minister, said BP would be "welcome" to joinexploration projects with his invigorated company.
"The pot is so enormous that we would welcome BP at one ofour larger projects," he said. "We already know what they wouldprefer to develop and in the near future we will find the one."
He said BP would get no special treatment over rivals likeExxon, Statoil and ENI, which have alreadysigned up to work in the Arctic on some of Rosnefts 41 offshorelicences, although both he and Dudley pointed out that BP wouldbenefit anyway as a one-fifth Rosneft shareholder.
Dudley, under huge pressure in recent months as the dealcame together during ongoing oil spill litigation in the UnitedStates, looked more relaxed than he did a few weeks ago at thecompany's fourth quarter results presentation.
CHEAP CHINESE CASH
To acquire TNK-BP, which pumps oil at the rate of around 1.5million barrels per day, Rosneft had to borrow up to $40billion, mostly from Western banks. It has managed to cover itsmost immediate needs by lining up a syndicated loan as well as $10 billion in financing from traders Vitol and Glencore.
According to industry sources, Rosneft has been in talkswith China to secure cheaper loans in exchange for boosting oilsupply to the world's top energy consumer.
Rosneft paid $27.73 billion cash to AAR for its half ofRussia's third-largest crude producer.
The deal with BP nets the British company $12.48 billion incash, including a $700 million dividend paid out in Decemberafter the deal was struck, plus an 18.5 percent Rosneft stakethat lifts its holding in the state firm to 19.75 percent.
BP will have two seats on the Rosneft board, including oneoffered to Dudley, who served as chief executive of TNK-BP until2008.
The AAR part of the deal will share the cash pot betweenMikhail Fridman, German Khan, Viktor Vekselberg and LenBlavatnik, all of whom emerged as tycoons after the Russianprivatisations of the 1990s.
Khan, who effectively heads TNK-BP and is Fridman's partnerin the Alfa Group consortium, sought advice and broachedpotential partnerships.
"Alfa Group is currently setting up a major, newinternational investment business which draws on the group'ssignificant expertise in oil and gas and telecoms, looking forlong-term, strategic investment opportunities in Russia, Northand South America, Asia and Africa," Stan Polovets, the CEO ofAAR, told Reuters.
He added that the new company will receive a significantpart of the proceeds from the sale of TNK-BP, of which AlfaGroup's share is close to $14 billion.
Sources have told Reuters that mining tycoon Vekselberg ofthe Renova Group and Blavatnik of Access Industries, are likelyto bow out and focus on other ventures and charity work.
One of the holding companies in TNK-BP's structure is basedin Cyprus. Sechin said the bank closures there of recent days asa financial crisis rages did not result in any losses for anyparties involved.
