BP's attempt to gain a foothold in Russia's offshore Arctic oil fields through a deal with state-controlled Rosneft finally collapsed on Tuesday.
BP said it failed to resolve a dispute with Russian partners in TNK-BP who had challenged its tie-up with Rosneft.
With BP's production falling after it sold fields to pay for the Gulf of Mexico oil spill, the deal was intended as a signal the British company can still offer long-term growth.
A last-ditch effort to get the deal through had involved BP and Rosneft making a cash and stock offer to buy out the co-owners of BP's Russian venture TNK-BP, represented by the Alfa-Access-Renova (AAR) consortium. But there was no agreement.
BP had until 2300 GMT on Monday to complete a $16 billion share swap with Rosneft as part of a deal that would have given the it an interest in an offshore Arctic exploration venture leases that could contain over 40 billion barrels of oil.