BP set to talk with oligarchs over Rosneft tie-up

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BP and Kremlin-owned Rosneft unveiled the Arctic venture in January with plans to explore around 125,000 square kilometres in the oil-rich South Kara Sea.

But BP's partners in its current Russian joint venture TNK-BP put a temporary halt on the move earlier this year, arguing it breached an agreement that TNK-BP should be the firm's main conduit for doing business in Russia.

The injunction was extended by the London-based Stockholm Arbitration Tribunal two weeks ago. But BP is set to argue to the panel that its share swap with Rosneft, which sees BP boost its stake to 11% and the Russians take a 5% stake in the UK firm, can carry on without breaching the agreement with TNK-BP. The Russian oligarchs, represented in TNK-BP through the Alfa-Access-Renova consortium, will argue that there is no purpose for the share swap without an exploration deal.

It is understood that BP's chief financial officer Byron Grote will be present at today's hearing.

Sources close to the firm said BP would look to negotiate directly with the Russian oligarchs, if the panel upheld its opposition, to strike a commercial deal. Its relationship with AAR has suffered since the move with the billionaire Russians blocking a $1.8 billion dividend from TNK-BP in February.

The Rosneft deal has drawn opposition by shareholders such as Standard Life, who are objecting to the dilution of their stakes.

BP today continued its asset sales to pay for the Gulf of Mexico oil spill clear-up with the $680 million sale of subsidiary Arco.