BP’s talks on buying out its Russian billionaire partners in TNK-BP broke down on Wednesday morning on the eve of a deadline to complete a $16bn share swap with Rosneft.

People close to the discussions said BP and Rosneft had ended talks with Alfa-Access-Renova because the Russian billionaire partners made “unrealistic” demands for a buyout of their 50 per cent stake in TNK-BP, BP’s existing Russian oil venture, which would have been detrimental to the interests of BP shareholders.

Amid large aftershocks and fears of nuclear contamination rocking  eastern Japan on a daily basis, it was the last thing anyone in the country needed to hear on Tuesday: that the crisis at the crippled Fukushima nuclear power plant 240km northeast of Tokyo had been upgraded suddenly by two notches from five to seven – the highest level on the International Atomic Energy Agency scale – on par with the 1986 Chernobyl nuclear meltdown disaster.

As nuclear crisis warnings go, it was one of the most baffling – and bafflingly timed – alerts ever issued by a government.

The global energy market is bracing for a shock as Japan seeks to replace large amounts of the country’s nuclear power capacity devastated by Friday’s earthquake.

Japan is the world’s third largest oil importer, after the US and China, and the top importer of thermal coal and liquefied natural gas, so any abrupt change in energy production could have a major impact in global commodities markets, analysts warned on Sunday.

For many Japanese the blast at the Fukushima Daiichi power plant on Saturday will reignite deep-seated distrust of the nuclear power industry following a series of major disasters.

Although Yukio Edano, the chief government spokesman, stressed that the government was taking all possible measures to contain the impact of the explosion, it did not take long for criticism to begin.

Nuclear energy experts were working on Saturday to establish the chain of events at Japan’s Fukushima Daiichi facility, which suffered an explosion following Friday’s 8.9 magnitude earthquake. Experts outlined the range of possible scenarios, based on information available from official Japanese sources.

This interactive map tracks the impact of Friday’s earthquake in Japan, as well as the resulting tsunami across the Pacific.

Follow the latest news on Japan’s earthquake here.

Japan has declared a “nuclear emergency” at an atomic plant north of Tokyo after cooling systems failed following the country’s 8.9 magnitude earthquake.

Naoto Kan, prime minister, stressed that no radiation had leaked from the Fukushima Daiichi facility’s six reactors. But residents living within 3km of the plant were being evacuated by the military, and those within 10km told to stay in their homes.

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