In a compromise with Russian partners who have fought for a slice of the action, BP (BP. L) has agreed to cede its share of an Arctic oil exploration pact with Rosneft to its half-owned affiliate TNK-BP.

While citing a decision by an arbitration panel, the TNK-BP partners said in a joint statement that they had given a green signal to a parallel $16 billion share swap deal between the British oil company and Russia's state-controlled oil group Rosneft.

In an official statement, Russia's Deputy Prime Minister and Rosneft board member Igor Sechin had earlier said that Rosneft did not want TNK-BP to be involved in the Arctic deal as it had no deepwater offshore expertise and when Rosneft was asked to comment on this, it preferred to stay silent on the issue.

This deal is being considered as BP's first major strategic move after last year's U. S. Gulf oil spill disaster shattered its reputation and hammered its share price and the owners of the other half of TNK-BP seemed quite satisfied from this move.

Stan Polovets, Chief Executive of Alfa-Access-Renova (AAR), said, “We welcome today's developments. Today's agreement provides a good way forward for achieving these priorities and opens the way to bring BP's valuable expertise and technology to offshore exploration in Russia”.