By Sarah Young and Olesya Astakhova
LONDON/MOSCOW (Reuters) - Russia's Rosneft <ROSN.MM> vowed to push ahead with a strategic alliance with BP <BP.L>, despite a block on the deal by the British oil company's partners in joint venture TNK-BP <TNKBP.UL>.
Rosneft Chairman Igor Sechin said an arbitration panel ruling preventing BP and the state-controlled energy giant from jointly exploring Russia's Arctic region and from executing a $16 billion share swap did not void the deal.
"The court didn't block (the deal), it extended the injunction until April 7. We must await the court's verdict," Sechin, also Deputy Prime Minister, told reporters.
He said Rosneft had already suffered losses as a result of the actions by BP's TNK-BP partners Access-Renova (AAR), which pursued court action against the BP-Rosneft tie-up, arguing the alliance violated their right of refusal.
Russia's largest oil company was "satisfied" with BP as its partner and would defend its interests, Sechin said on Friday.
AAR, which represents BP's billionaire partners in TNK-BP, had hailed Thursday's arbitration ruling as a victory in their bid to prevent BP hooking up with Rosneft.
AAR said BP was now "prohibited from entering into any future share arrangement with Rosneft that has any kind of strategic component," potentially opening the door for a rival to step in and replace BP as Rosneft's partner.
The ruling raised immediate questions about BP Chief Executive Bob Dudley's tactics in Russia and raised the prospect Rosneft could look elsewhere for the expertise it needs to get oil out of Russia's Arctic region.
"Given his (Dudley's) past relationship in Russia, how difficult it has been, he should have been a bit more appreciative of how tricky it can be operating in Russia," Arbuthnot Securities analyst Dougie Youngson said.
Rosneft head Eduard Khudaynatov said in January the group was awash with proposals from foreign companies for exploring in the Arctic, and Royal Dutch Shell <RDSa.L>, BP's arch rival, has already confirmed its interest.
"The cleanest thing for Rosneft, if it wants to start developing its offshore acreage and resource potential, is to choose a different partner," Sanford C. Bernstein analyst Oswald Clint said, adding TNK-BP lacked the necessary know-how.
TNK-BP shareholders said earlier this month the joint venture could supplant BP in the share swap with Rosneft.
This was rejected by Rosneft, which recently struck deals with U.S. oil majors Chevron <CVX.N> and Exxon Mobil <XOM.N> to explore in the Black Sea.
BP shares were down 0.6 percent at 1228 GMT, with analysts saying many had not priced the Rosneft deal into estimates because of uncertainty about it from the start.
"We had never put in any increase in our share price when the original deal was announced because the actual exploration activity is a long way ahead ... but for us no big change in where we stand on the valuation perspective," said an analyst who declined to be named.
Rosneft shares were 1.1 percent lower.
BP's embarrassment over the ruling was compounded by the fact chief executive Dudley had been seen as more plugged into the complexities of Russian oil than most.
He was in charge of TNK-BP before being forced to leave Russia in 2008 due to what he said was a campaign of harassment by the joint venture's co-owners.
As well as bad news for Dudley, who took over as CEO last year following BP's disastrous Gulf of Mexico oil spill, Thursday's decision was seen as a blow to the Russian government, which has struck several deals with energy majors to tap new oil and gas regions to sustain long-term output.
On Thursday, Dudley played down the impact in an internal memo, saying: "BP's long history in Russia demonstrates progress and growth is not always straightforward. But it has consistently been successful over the long term."
Dudley said BP would seek a ruling on whether the share swap under which it would exchange 5 percent of its own stock for a 10 percent holding in Rosneft -- may proceed on its own.
"I guess they (BP) feel that over time, that (the share swap) would allow them potentially opportunities at some stage, but obviously it's a sub-optimal solution relative to the original plan," said Barclays Capital analyst Lucy Haskins.
Few expect a quick resolution to the stand-off.
"This was always going to be a tricky situation trying to balance a relationship with Rosneft and TNK. So, I think this is going to run for much longer than BP has been letting on," Youngson at Arbuthnot Securities said.
(Additional reporting by Douglas Busvine, Melissa Akin and Vladimir Soldatkin in MOSCOW and Stephen Jewkes in MILAN; Writing by Alexander Smith; Editing by Dan Lalor and Sophie Walker)