Russia's state-controlled energy giant Rosneft has reached a deal to buy a competing energy company controlled by Britain's BP and a group of Russian billionaires.

Rosneft says it will pay nearly $55 billion for Russia's third-largest oil company, TNK-BP, in a deal that will leave BP with about a 20 percent stake in the merged company.

With the acquisition, Rosneft will control more than 40 percent of Russia's crude oil output, making its production about equal to that of the world's biggest energy company, U.S.-based Exxon Mobil.

Russian President Vladimir Putin has sought to reassert government control over the country's vast oil and gas industry. He called the Rosneft deal “not only good for the Russian energy sector, but also for the Russian economy.”