This week is set to see the Russian Government-controlled Rosneft buy BP's 50 percent stake in the Russian oil joint venture, TNK-BP, for an estimated 28bn dollars.

According to media reports, Rosneft might also acquire the other 50% from the Alfa-Access-Renova (AAR) consortium, run by four Soviet-born billionaires.

The deals if approved will transform Rosneft into one of the world's largest oil companies and given the Russian state control over an important strategic asset. There would also be significant benefits for BP, while the billionaires will add a few more billions to their names.

It has been mooted by the Financial Times that the deal would give BP between $15-20bn in cash, plus a minority stake of between 10-20% in Rosneft.

BP formed TNK-BP in 2003, investing $8bn into a vehicle that combined its Russian oil holdings with those of the AAR consortium.

AAR had initially expressed an interest in buying BP's stake but was reportedly unable to come up with the funds in time.

The stakes are high and concerns are already being expressed about whether Rosneft's possible purchase of BP's stake, and possible that of AAR, will pose a threat to competition in the company's oil market.

Bloomberg reports that BP and Rosneft are no strangers. BP Chief Executive Bob Dudley tried to forge an alliance with Rosneft last year to drill untapped Arctic reserves before it was blocked by AAR.

The British oil company holds 1.25% of Rosneft after buying about $1bn of shares in its 2006 initial public offering. BP and Rosneft are also partners in the German Ruhr Oel Refinery venture.

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