| SOCHI, Russia
SOCHI, Russia British oil company BP (BP.L) wants to buy a stake in Russian state-controlled peer Rosneft (ROSN.MM), adding a new dimension to a long-running struggle for control of a big chunk of the country's oil production.
BP chief executive Bob Dudley and chairman Carl-Henric Svanberg put the Rosneft proposal to Russian President Vladimir Putin on Tuesday, Rosneft CEO Igor Sechin said on Friday.
The deal would see Rosneft take BP's stake in TNK-BP TNBP.MM - a $60 billion joint venture with Russian oligarchs that BP wants to exit. Last year, TNK-BP blocked a deal that would have seen BP and Rosneft explore for oil in the arctic.
"We are very pleased by this offer. It allows us to fulfill the tenets of cutting the state's stake (in Rosneft), and we are working firmly toward this," said Sechin, a close ally of Putin.
A BP spokesman said: "BP is considering further investment in Russia regardless of who we sell our stake to ... we would be interested in investing some of the proceeds in buying shares in Rosneft", adding that any purchase depended on a sale of its TNK-BP stake going through.
BP is seeking to exit its troubled but lucrative investment in TNK-BP, Russia's third-largest oil company, which it formed nearly a decade ago with four tycoons - Len Blavatnik, Mikhail Fridman, German Khan and Viktor Vekselberg - to tap the country's vast energy reserves.
In July, BP entered a 90-day period to talk to potential buyers including the AAR consortium which represents those tycoons.
Sechin said Rosneft was not in talks with AAR to buy its stake, adding Rosneft has no plans itself to buy shares in BP.
Rosneft's plan to buy BP's TNK-BP stake are progressing and it is talking to banks about raising $15-$20 billion to finance the deal, bankers told Reuters this week.
Kommersant reported on Thursday a deal being discussed would see Rosneft buy 25 percent of TNK-BP's shares for $10-$15 billion cash with the other 25 percent paid for with Rosneft shares, leaving BP with a stake of at least 12.5 percent in Rosneft.
Sechin said the deal's structure has not been finalized, a position corroborated by BP sources.
His news conference, made at a business forum in the Black Sea resort of Sochi, coincided with Prime Minister Dmitry Medvedev's keynote address, and stole headlines during one of the premier's annual policy speeches.
Putin issued a rare rebuke of Medvedev's government on Tuesday, criticizing its fiscal plans.
Tension has been less well concealed between Medvedev's government and Sechin over plans to privatize Rosneft.
The government is aiming to raise $20 billion selling state assets, including stakes in Rosneft and other energy assets.
Sechin has lobbied for a sale of state energy assets to Rosneftegaz, the holding which owns much of the state's stake in Rosneft, as a halfway house for state assets to gain value before being floated on the market.
BP's proposal could be a compromise solution. Instead of buying new or treasury shares, it would buy part of the state's Rosneft holdings, transferring them to a Kremlin-approved strategic investor while achieving the government's formal aims.
Sechin's main opponent on privatization, Deputy Prime Minister Arkady Dvorkovich, told a newspaper last week he objected to the possible purchase of TNK-BP by Rosneft on the grounds that it increased state control of the oil industry.
BP shares closed down 0.7 percent at 441 pence.
(Additional reporting by Denis Pinchuk and Katya Golubkova; Writing by Megan Davies; Editing by Dan Lalor and Andrew Callus)