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    http://www.express.co.uk/posts/view/352853/Rosneft-is-poised-to-buy-BP-s-holdings-in-Russia THE long-running saga of BP's troubled Russian joint venture moved closer to a conclusion last night as it held talks on a deal with state-owned oil giant Rosneft. Igor Sechin, chief executive of Rosneft, flew in to London for discussions on buying out BP's 50 per cent stake in TNK-BP in a deal that could be worth as much as £17.5billion for the FTSE 100 group. In what insiders described as "a fast-moving situation" and "a game of brinkmanship" Rosneft also looked poised to buy the remaining stake held by BP's partner, the AAR consortium controlled by a group of Russian billionaires. After years of friction between the two sides, both BP and AAR this year signalled they could sell out of the partnership or seek full control. In a dramatic move last night AAR pulled out of the bidding to buy BP's stake just hours before today's deadline. That paves the way for Rosneft to buy out both BP and AAR to gain control of the highly profitable TNK-BP business and create the world's largest oil company. BP has made it clear that it retains ambitions to remain in Russia and to expand in the Arctic

    As part of the deal BP is expected to take a 10 per cent stake in the enlarged Russian business, giving it access to one of the world's most important oil-producing countries. AAR sources said the tycoons had decided not to bid because they had been unable to raise sufficient finance in time and BP had signalled it was not interested in their offer. Another major problem for AAR is that Rosneft had already secured backing from a number of key banks who were unable to work with a rival bidder. An alliance between the oligarchs and the Kremlin-backed company has always been seen as unlikely and AAR made it clear that it would seek to sell its holding if Rosneft came on board. Although TNK-BP has been very lucrative, generating £23billion in dividends after an initial investment of £5billion each in 2003, the two partners have always had a stormy relationship. In 2008 Bob Dudley, the then TNK-BP boss and now BP's chief executive, was forced to leave Russia as tensions worsened. Last year the two clashed when BP sought a separate deal with Rosneft. The oligarchs blocked the planned tie-up and turned down an offer from BP and Rosneft to buy them out. But BP has made it clear that it retains ambitions to remain in Russia and to expand in the Arctic. It would use some of the cash from a Russian deal to help fund the compensation bill from the Gulf of Mexico disaster in 2010. BP shares rose 13p to 448½p.

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