BP May Buy Out Russian Partner for $30 Billion: Report

BP is back in last-ditch talks to buy out the Russian partners in its joint venture TNK-BP Ltd, in a deal that could be worth $30 billion or more, the Wall Street Journal reported on Sunday.

BP sign
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BP sign

The deal would salvage the British oil giant's efforts to reach a landmark Arctic alliance with Russian state oil company Rosneft, the Journal said, citing people familiar with the situation.

Through a series of transactions with BP

, it would give Rosneft the 50 percent stake in TNK-BP now owned by the billionaire partners, the report said.

In turn, those partners would get cash and substantial stakes in both BP and Rosneft, according to the report.

BP and Rosneft, meanwhile, would be able to proceed with a multibillion-dollar plan to explore for oil in the Arctic Sea north of Russia, a deal that BP's existing Russian partners in the TNK venture had opposed.

Representatives for BP were not immediately reached for comment outside business hours. A preliminary agreement could be announced as early as Monday, when BP faces a deadline to complete the arctic alliance with Rosneft, including a $16 billion exchange of shares between the two companies, the Journal said. The talks are continuing and could still break down, the report said.

Failure would likely mean the end for BP's hopes of closing the Arctic deal, because Rosneft has so far opposed a compromise plan that would have seen TNK-BP take the British giant's place in the project.

In January, BP and Rosneft agreed to a $16 billion share swap and an exploration venture aimed at unlocking potentially 40 billion barrels of oil in the Russian Arctic Sea.

The deal, which was announced with great fanfare by BP, was supposed to mark a turning point in the London-based oil giant's fortunes after the Gulf of Mexico oil spill.

But BP's oligarch partners in TNK-BP objected, saying the transaction violated an agreement BP made, when founding TNK-BP, to use TNK-BP as its principal vehicle for investment in Russia.