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November 23 2012, 07:59AM

British oil major BP and Russian group Rosneft say they have signed a final agreement on the sale by BP to Rosneft of half of the third biggest Russian oil company, TNK-BP, as part of a major shift in strategy by the British company.

"BP, Rosneft and Rosneftegaz - the state-owned parent company of Rosneft - have signed definitive and binding sale and purchase agreements for the sale of BP's 50 per cent interest in TNK-BP to Rosneft and BP's investment in Rosneft," a BP statement said.

The deal is still subject to approval by regulatory authorities and should be completed "in the first half of 2013," it added.

Once all parts of the complex transaction have been finalised, Rosneft is set to become one of the world's biggest oil companies while BP stands to gain crucial access to Arctic oil reserves.

On October 22, Rosneft announced it had reached an agreement with BP and a consortium of Russian billionaires known as AAR to purchase their respective 50 per cent holdings in TNK-BP, a lucrative oil producer that was mired in a dispute among its shareholders.

Under the terms of its deal with Rosneft, BP is to receive $US17.1 billion ($A16.57 billion) in cash and shares giving it 12.84 per cent of the equity in Rosneft.

BP also plans to buy a separate 5.66 per cent stake in Rosneft from the Russian state for $US4.8 billion ($A4.65 billion) which, along with a small stake of 1.25 per cent that BP already owns, would give it 19.75 per cent of Rosneft's equity in all.

That acquisition was "an integral part of the transaction," BP noted.

Rosneft added in a separate statement that it was also close to agreement with AAR on the acquisition of the other half of TNK-BP for $US28 billion ($A27.14 billion).

When the transactions have been completed, Rosneft is set to become the world's biggest oil company in terms of market capitalisation.

BP, which wants to reposition itself after the Gulf of Mexico oil spill disaster in 2010, would then own a major share of the Russian group and could thus have access to major exploration projects in the Arctic, analysts say.