The move, which reportedly would be worth more than $25 billion, would be a big boost to Rosneft's oil portfolio. If it buys the other half of TNK-BP, as well, it would move ahead of ExxonMobil as the world's largest oil company. A combined Rosneft-TNK-BP would be producing well over 4 million barrels of oil and gas a day, according to Reuters.
For BP, the deal would include a minority stake in Rosneft, which could help the British company gain more access to Russian energy reserves.
In a statement Monday, BP acknowledged the negotiations but said no deal had been reached yet.
The partnership between BP and AAR, a group of Russian billionaire shareholders that make up the other half of TNK-BP, has been marked by friction since its inception. In June, BP said it was selling its share in the venture.
Some reports indicate that BP may receive a 10 to 20 percent share in Rosneft and have a seat or two on Rosneft's board. Rosneft has close ties to Russian President Vladimir Putin.
The purchase would drastically alter the global energy market with some concerned that price distortion would damage the already volatile sector.
President Putin has actively pursued state control over Russia's oil market after it was privatized in the early 1990s. In 2007 Rosneft acquired Yukos, then Russia's largest oil company, after it was pushed into bankruptcy.
Russian officials were quick to downplay the effects of the looming acquisition.
“I don’t think that would be a monopolist situation,” Energy Minister Alexander Novak told Russian news agencies Thursday. “We have rather high competition on the market already.”
So far Russian officials deny they have received any formal notice of Rosneft's intentions, and BP and AAR has declined reporters' requests for comment.