Rosneft eyes BP's Russia venture

Russian state giant Rosneft is looking to cement its grip on oil production, announcing talks with BP over the British group's lucrative stake in the TNK-BP venture it co-owns with four tycoons.

BP immediately said it "welcomed" the interest after a decade of acrimonious relations with Russian officials that threatened to imperil its future in the world's largest energy production market.

The announcement follows weeks of denials by Russia's oil champion of any claims on a venture that has grown into the country's number three producer since being formed in 2003.

BP on June 1 said it was seeking buyers for its 50 per cent stake because of bruising boardroom battles with the powerful billionaires who jointly operate a venture now responsible for nearly a third of the British groups oil output.

"The parties agreed to commence negotiations on this matter and signed a non-disclosure agreement," Rosneft said in a statement on Tuesday.

The Russian firm said it had also informed the tycoons who operate their part of TNK-BP through the Alfa Access Renova (AAR) consortium of their interest in BP's stake.

BP for its part said "that while conducting parallel discussions with Rosneft and any other interested parties, it will negotiate in good faith with Alfa Access Renova in accordance with its legal obligations."

AAR last week announced opening negotiations on acquiring half of BP's shares in the joint venture - a 25 per cent share estimated to be worth at least $US10 billion ($A9.8 billion).

The TNK-BP shareholders' agreement gives the tycoons three months to negotiate a deal with BP first but does not keep the British firm from holding talks with other interested parties.

Some analysts now see a wave of consolidations to hit the Russian oil sector as the state - in control of just under a third of production - sets sights on difficult offshore terrain needed to replace dwindling Siberian output.

"Russia stands on the threshold of a mergers-and-acquisitions era similar to one that transformed the global oil industry 15 years ago," Renaissance Capital analyst Ildar Davletshin wrote in the Vedomosti business newspaper.

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