Rosneft has pulled out of its strategic alliance with BP and will look for new partners in Arctic oil exploration, Interfax quoted a source close to the state-held company as saying Tuesday.
Rosneft was pulling out due to the unconstructive position adopted by the Russian shareholders in BP's joint venture in Russia, TNK-BP, who had obtained a court injunction against the deal, the source said.
"This entire time, Rosneft has been keeping to a constructive position," the source told the Russian news agency.
"This is confirmed by the fact that it agreed to extend the deadline, and also expressed readiness to buy out AAR's share jointly with BP for a premium price," the source said.
AAR represents the four Russian shareholders who control half of BP's local venture TNK-BP.
The Russian state-held company was now looking for new partners for its Arctic projects, the unnamed source added.
Rosneft had earlier agreed to extend the deadline by which the $16 billion share swap and joint exploration deal could be reached until Monday.
News reports said BP and Rosneft had been willing to pay more than $30 billion (21.1 billion euros) for the Russian partners' stake.
The partners had earlier successfully challenged the tie-up in court and refused to sell their stake for prices proposed by the two companies.