BP has agreed a deal worth more than £17 billion in a move that will see it take a stake in the world's largest publicly listed oil producer, it was reported today.
The oil giant's board is understood to have unanimously approved a plan at a meeting on Friday to sell its 50% stake in its troubled TNK-BP joint venture to Rosneft, in return for cash and shares in the State-backed Russian energy firm.
The final details of the deal are still being thrashed out ahead of an announcement possibly as soon as tomorrow, but it is thought BP will receive up to 13 billion US dollars (£8 billion) and take a stake of between 15% to 20% in Rosneft.
Rosneft would become the world's biggest publicly traded oil company after the deal, with daily crude output of more than three million barrels.
It would also end years of wrangling over BP's Russian joint venture, which is owned with partners Alfa-Access-Renova (AAR).
BP has had a fraught relationship with AAR, although the venture is thought to have earned the British firm 19 billion US dollars (£11.8 billion) in dividends.
A dispute between BP and AAR effectively sank a proposed tie-up between the British blue chip and Rosneft last year, which included Arctic exploration plans.
Key points still under negotiation are said to be the number of seats BP will be given on Rosneft's board, with BP likely to take one or two seats.
It is thought that BP chief executive Bob Dudley and David Peattie, the group's head of Russia, could join the board, while a prominent Russian may also reportedly be appointed to BP's board - such as Rosneft boss Igor Sechin.
But there are concerns of potential legal action from AAR, following its success in scuppering the Rosneft deal with BP last year.
BP was not immediately available for comment.
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TNK-BP has exploration and production assets as well as downstream marketing operations in Russia and Ukraine, alongside interests in Brazil, Venezuela and Vietnam.
It is the third biggest oil producer in Russia behind Rosneft, which the state controls, and second-placed Lukoil, which is owned by Russian investors. The business accounted for more than a quarter of BP's production and 90% of its 2011 dividend.
