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Rosneft issued more menace-laden warnings on March 25 as it insisted it will push through its planned tie-up with BP in full and has no plans to allow the Russian oligarchs in the TNK-BP joint venture, who were responsible for a Swedish arbitration court blocking the BP-Rosneft tie-up, into the deal.

In January, the two sides signed off on a deal that would have seen BP own 9.5% of Rosneft's shares, while the Russian group would have taken a 5% stake in BP, and form an exploration and production joint venture to explore for oil in the Arctic. This angered the holding company Alfa-Access-Renova (AAR), which owns 50% in the TNK-BP joint venture and represents four of the most powerful businessmen in Russia, because they allege the tie-up violates a shareholder agreement inside the JV that either partner must run all Russian projects via TNK-BP. An independent arbitration tribunal in Stockholm agreed, finding that the deal breached agreements in place and extended an injunction on the tie-up.

AAR CEO Stan Polovets said in an e-mailed statement: "Wilfully ignoring the provisions of the shareholder agreement was a serious misjudgement by BP that has severely damaged the relationship between the TNK-BP shareholders; it has also harmed BP's reputation in Russia. We expect [BP CEO] Bob Dudley to make every effort to rectify the situation and rebuild the trust that has been lost."

For its part, BP said in a statement it "will now apply for a determination whether the share swap may proceed on its own." It added that it hopes to "[find] a way to resolve its differences with its Russian partners to allow these important Russian Arctic developments to proceed in future."

There was less ameliorative talk out of Rosneft. Russian Deputy Prime Minister Igor Sechin and CEO of Rosneft, a man who has been dubbed the scariest in Russia in the past, insisted the company will push through the full tie-up, and warned that the company could seek compensation should the Arctic project it plans to carry out with BP fall through.

Sechin reminded reporters on March 25 that the Swedish court only granted a temporary restraint. "The court didn't block [the deal], it extended the injunction until April 7. We must await the court's verdict."

The original agreement signed in January sets April 14 as the date to ink the final deal, but the pair are said to be looking at moving the deadline.

No match

Whilst the press has been discussing the failure of the deal, you'd be hard-pressed to find an analyst in Moscow who believes that the Kremlin - which is essentially the power standing behind Rosneft - won't force the deal through, one way or the other. The oligarchs inside AAR are very powerful - but no match for the likes of Sechin.

The Arctic exploration is a key plank in the Kremlin's energy strategy. The Rosneft-BP deal is also a blueprint for tie-ups that are central to Russia's plans to modernise and diversify the economy: large international companies are offered access to Russia's rich natural resource basis through minority stakes in state-owned companies and in return the Russian company gets access to world class technology.

The deputy PM went on to yet again denigrate the idea that TNK-BP could take BP's place in the deal and denied there were any talks to buy out the oligarchs. "Rosneft is not holding any talks with AAR. We haven't received any proposals regarding these proceedings and are not holding any talks," Sechin said.

Answering a question on whether TNK-BP could participate in Rosneft's deal with BP, Sechin said that TNK-BP's shares are of no interest for the swap deal, as they aren't traded in New York, London or Frankfurt.

There were more reports on March 28 that BP could be forced to spend more than €10bn to buy out its partners in TNK-BP. Sources close to the dispute were cited by The Scotsman on March 28 as saying that Mikhail Fridman, chief executive of TNK-BP and the main partner in AAR, has told BP to buy out him and his colleagues, a claim denied by AAR.