Post date: Oct 22, 2012 7:45:1 PM
It's one of the biggest deals the oil industry has ever seen.
The deal comes in two stages, and is worth around $55 billion in all.
BP's CEO Bob Dudley says it's a great deal for the company.Bob Dudley, CEO, BP saying:
"Rosneft is a great company with great prospects. It has great assets today with the potential to grow. It's a company whose management is bringing in new governance, new management techniques and technology into the company. And BP looks forward to being part involved on the board of Rosneft."
Under the first stage of the deal BP will receive a near-20 percent stake in Rosneft and two seats on the board.
In stage two, AAR, the consortium made up of four Russian oligarchs will get $28 billion in cash.
But the two deals are separate. Rosneft say the deal with AAR is still subject to negotiations.
It comes after Russian president Vladimir Putin gave it his back.
SOUNDBITE: President Vladimir Putin, saying (Russian):
"This is a very good signal for the Russian market, for the world energy market, and is another proof of our partners' trust in the Russian market."
It should be a relief for BP, who's relationship with AAR had soured.
Although the partnership was a lucrative one, paying billions of dollars in dividends it's been an unhappy marriage.
The new pairing with Rosneft, Russia's top producing company, will allow BP to stay inRussia.
And it brings the company closer to the Kremlin which has a much tighter grip on the oil industry than it did in the 1990s when BP first began investing in Russia.