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BP and Rosneft in exploration pact

BP and Russia's state-controlled Rosneft have agreed to a share swap under which they would jointly explore for offshore oil and gas.

The deal immediately raised concerns in the United States about Russia's global oil ambitions.

BP, recovering from its Gulf of Mexico oil spill, said today it will swap 5% of its shares, valued at $7.8 billion, for 9.5% of Rosneft, Reuters reported.

BP and Rosneft plan to drill in the Kara Sea in the Arctic circle off Russia’s North Coast, Bloomberg reported.

In October, Rosneft received the rights to develop three Kara Sea blocks, known as East Prinovozemelsk-1, 2 and 3, according to the government website.

The deal, which is expected to be completed in a few weeks, highlights a sharp turnaround in relations with Moscow both for BP and its chief executive Bob Dudley, who was forced to flee Russia in 2008 after heading BP's Russian joint venture, TNK-BP, which is half-owned by BP.

Dudley had been the boss for TNK-BP's formation in 2003 and was forced to leave due to what he described as a campaign of harassment by BP-TNK's billionaire oligarch co-owners.

The issue has since been resolved and Dudley returned to Moscow for the first time this summer, following his appointment as chief executive of BP, to be warmly welcomed by officials.

Russia is a key part of BP's global operation, providing the company with a quarter of its reserves before the US oil spill, so it is vital for Dudley to establish a good working relationship with the world's largest oil exporting nation.

Congressman Edward Markey, who is the top Democrat on the House Natural Resources Committee, immediately called for a review of the deal by US regulators.

Russia has increasingly been looking to raise its influence on the global financial stage, with major companies – including state-controlled ones – seeking foreign acquisitions.

Some deals have come under fierce opposition in the countries involved, such as Surgutneftegas's purchase of a stake in Hungary's MOL. Others, like Sberbank's bid for German carmaker Opel, collapsed.

Prime Minister Vladimir Putin's government has also pledged to ease investors' access into Russia as it looks to foreigners to play a key role in helping to modernise the economy – including through taking part in a big privatisation drive starting this year.

Britain's new coalition government has attempted to improve relations with Moscow, although tensions resurfaced last month with the expulsion of a Russian diplomat from London.

US-listed shares of BP, which had been trading higher, fell slightly to $48.87 in post-market trading. The stock had closed at $49.25 on the New York Stock Exchange.