Rosneft will pull out of its proposed strategic alliance with BP and launch a search for new partners to explore the Arctic Kara Sea blocks, a source close to the company said on Tuesday.

The source told Reuters that talks to buy out the Russian shareholders in BP's Russian venture TNK-BP had failed to unblock the deal.

We got the feeling that they were working to undermine the deal and did not want Rosneft to become the largest public oil company in the world by production and reserves, the source said.

(Reporting by Vladimir Soldatkin, Writing by Douglas Busvine)