BP has confirmed it is in advanced talks with Russian state oil firm Rosneft over the sale of its 50 per cent stake in TNK-BP.

The British firm said no agreement had yet been reached and further announcement would be made "if and when" a deal is struck.

BP's relationship with TNK and its oligarch co-owners has been fraught, but has also delivered billions of dollars in dividends to the UK company.

Reports say the $27bn (£17bn) deal would see BP sell its troublesome Russian operation while forging a new alliance with the Kremlin.

According to unnamed sources reported in the media, BP will receive cash and shares in Rosneft, which is run by Igor Sechin, a close friend of Russian President Vladimir Putin.

This could leave it with with a stake in the Russian firm worth 16% - 20%, as well as two seats on the board.

The Sunday Times said the deal had been approved on Friday afternoon at BP's St James's Square headquarters in central London.

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