BP plc (NYSE: BP) is preparing to announce a major deal with Rosneft, the state-owned Russian energy giant, according to a report from the BBC.

BBC speculates that such a deal might involve the Russian government take a significant stake in BP.

BP’s new chief executive Bob Dudley will reveal details of the arrangement at a press conference later.

Following recent press speculation, BP confirms that it is in discussions with Rosneft relating to a possible arrangement. A further announcement is to be made, said a BP spokesman.

The new venture would represent BP’s first significant new operation since the Deepwater Horizon oil spill in the Gulf of Mexico occurred last year – a disaster that will cost the company up to $40-billion.

Russia’s Prime Minister Vladimir Putin has repeatedly stated that the two companies should work in tandem to develop Russia's potentially lucrative Arctic shelf.

BP shares climbed 3.60 percent in New York trading today.