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Despite firm denial of interest earlier in the year, Russian state-owned Rosneft said on July 24 it has entered negotiations with BP over a potential purchase of its 50% stake in the TNK-BP joint venture. However, analysts say a partnership between Rosneft and the other partner in the JV, the Alfa Access-Renova consortium of Russian oligarchs, is far from the most obvious outcome.

The British energy major confirmed it is in talks with the Russian state giant in parallel with its partner in the Russian JV, the Alfa Access-Renova consortium, and all options still look to be on the table. "It will negotiate in good faith with Alfa Access-Renova (AAR) in accordance with its legal obligations," BP said in a statement.

After the interminable struggle between BP and AAR over the JV flared up again, BP announced it would listen to offers for its 50% stake in TNK-BP on June 1. The market immediately speculated that Rosneft was an obvious suitor, but the state giant flatly denied its interest.

Last week, AAR offered to buy BP's 50% stake for $7bn-10bn, or to sell BP its 50% stake for cash and equity. Vedomosti reported on July 25 that BP is unimpressed with the offer. The entrance of Rosneft into the equation suggests BP could raise the sale price, should it decide to offload. Analysts at Renaissance Capital point out that, "with higher debt capacity than AAR, we believe Rosneft could make a more competitive bid."

However, the shareholder agreement behind TNK-BP - which AAR has used extensively in the past in its fight with BP, including to block a $16bn strategic tie-up between the British company and Rosneft last year - gives the Russian TNK-BP partner pre-emptive rights to buy the stake. "Rosneft has been informed that the other TNK-BP shareholders have also indicated their interest in acquiring part or all of BP's share and that BP has an obligation under the shareholder agreement to negotiate with the other shareholders," the Rosneft statement said.

It went on to claim that should BP sell to Rosneft - possibly creating the world's largest publicly traded oil company, points out VTB Capital - it would benefit both companies, as well as leading to the further development of TNK-BP.

Analysts at VTB point out, however, that: "it would be very difficult for the parties to agree on a price reasonable for both Rosneft and BP." They also suggest that an acqusition by Rosneft would fly in the face of the government's privatisation programme - although that kind of contradiction is unlikely to block a deal should the Kremlin back the idea. "The deal, were it to occur," they write, "would effectively mean the re-nationalisation of energy assets, which would go against the declared intentions of the government and could limit competition in the industry."

Clearly anticipating such objections - at least from the market - Rosneft claimed that a deal would merely see it following global trends, while offering significant benefits. "Today we see oil asset consolidation all over the world. Rosneft is constantly considering new opportunities for growth and alliances," its statement reads, adding that it would count on a large synergy effect, especially in the sluggish development of Eastern Siberia deposits, the gas business, and oil products logistics.

Yet the company was also at pains to point out that there is no certainty that it will strike a deal with BP, a view analysts clearly share. AAR proved last year in blocking the BP-Rosneft strategic partnership that it can take on Rosneft, and the country's most powerful political figures, and win.

While Russian officials quoted by Interfax noted that Rosneft would need to get government approval - but that initially they see no problems with a deal - AAR's position is not yet known. Even should it agree to BP selling to the state company, Rosneft would then be faced with securing a sustainable shareholder agreement with AAR, or an attempt to buy it out of the JV also.

That has the market doubting a deal is due any time soon. "We think a possible partnership between Rosneft and AAR could face similar problems to those that BP and AAR are currently having," writes Renaissance Capital. "In addition, we doubt that BP is ready to leave Russia completely, so we expect a final deal to be concluded on different terms, with either both partners selling their stakes to Rosneft (BP could then launch a new JV with Rosneft) or just AAR selling its stake to Rosneft."

VTB notes that the news could be bad news for TNK-BP minorities, who would likely lose the high dividend payouts that AAR favours, and face uncertainty over shareholder buyouts further down the line. The analysts also worry that it may do little more than stir up the hornet's nest once more. "We think that the scenario of Rosneft buying BP's share in TNK-BP is unlikely to materialize," it write. "However, this news could escalate the BP-AAR conflict, resulting in the increased volatility of TNK-BP's shares."