Russians cast fresh doubt on BP's £10bn share swap deal with Rosneft

Russian energy minister Sergei Shmatko yesterday poured cold water on the prospect of BP and Rosneft reviving their recent plans for a strategic alliance.

"In its current form, the deal has become a burden and I don't believe there's any chance of reincarnation of it," Shmatko said in an interview.

There has been speculation in recent weeks that the bumper share swap deal may be resurrected but Shmatko's comments suggest the Russian government is much less optimistic.

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But he did note that BP and Rosneft were still in discussions and might be able to reach an agreement on swapping assets at some stage in the future.

"I am very sorry the deal didn't happen: it would have met our interests in terms of output growth and gaining access to new technology," Shmatko said.

"Both Russia as a country and Rosneft would have won significantly if it had gone forward."

In January, BP and Rosneft announced plans for a $16 billion (10bn) share swap and joint development of fields in the Arctic sea off Russia.

After months of talks, discussions broke down earlier this month.

Alfa Access Renova, a partner with BP in their TNK-BP venture, had argued that the tie-up had broken the terms of their agreement and went to court to block the deal. Shares in BP, which owns a 1.3 per cent interest in Rosneft, closed down 8p at 452p yesterday.