Rosneft, Russia's state-controlled energy firm, is one step closer to becoming the world's biggest oil company after reaching a $55bn deal with BP and a group of investors.

This means that BP and a consortium of Russian investors known as AAR, will each sell their 50 % share in a joint venture known as TNK-BP to Rosneft in return for cash and shares. The UK firm will get $17.1bn (£10.7bn) cash and a 12.84% stake in Rosneft, enabling BP to continue to share in Russia's vast energy resources. BP has agreed to eventually use some of the cash to buy further Rosneft shares, taking its stake to 19.75%.

This deal has the blessing of the Russian President Vladimir Putin, who said state-controlled Rosneft had made a good deal at a good price: "This is a good, large deal that is necessary, not only for the Russian energy sector but also the entire economy."

The $55bn value makes it the second largest transaction in oil industry history - behind the $80bn takeover of Mobil by Exxon in 1999 - and the biggest ever by a Russian company. Once the transaction closes, Rosneft will control around 40 % of Russia's crude output and match the annual production of Exxon Mobil.

Written and Presented by Ann Salter