Shaking up the energy sector, British powerhouse, BP Plc (NYSE: BP) and Russia’s largest oil producer, OAO Rosneft (MCX: ROSN), are considering a fresh deal following the collapse of a $16 billion share swap for an Arctic exploration alliance, according to Russian Energy Minister Sergei Shmatko.

The original Rosneft deal, for which negotiations began in January, would have given BP access to billions of barrels of oil. BP and Rosneft have been attempting to reach an agreement for four months, but the second date for completion has passed.  In a statement today Smatko essentially pronounced the deal dead in the water saying, “I don’t believe in the possibility of reincarnation for that particular deal,” but expressed hope about future business agreements between the companies.

BP’s Russian partners, AAR, comprised of a group of Soviet billionaires had been the main deterrent in the deal, bringing BP to U.K. court on the grounds that it violated their terms of agreement. A buyout offer for AAR was discussed but the three sides could not reach a final agreement.

As a result, the Arctic exploration seems as good as dead but Shmatko expressed hopes for continued discussions and opportunities with BP. BP’s loss could be a major gain for one of a host of other International oil companies who are competing for access to the wealth of oil in the arctic reserves. Rosneft , according to Shmatko will be “picky” in choosing a new partner but will consider proposals from any international companies expressing interest.

Energy enthusiasts should keep a close eye on the companies that could potentially end up with rights to the exploration in that area, as well as the continued relationship between BP and Rosneft. With oil pushing lower on European debt concerns, energy bulls may want to consider investing on the dip.

This strategy worked for one bullish investor who agreed to pay an average of $0.82 per contract for Cheniere Energy Partners LP (AMEX: CQP) for a total cost of around $1.64 million for around 20,000 September $12 strike calls in the middle of last month when shares had declined 23 percent on the previous week. Trading at $7.74 at the time, with 5 months to go before expiration, the move led to considerable market speculation on what drove the decision. Perhaps it was some early insight into the decision by the U.S. Department of Energy to expand its approval for liquid natural gas exports from the Cheniere Energy Partners LP Sabine Pass LNG terminal to “any country that has, or in the future develops the capacity to import LNG and with which trade is permissible.” The previous order permitted only Free Trade Agreement countries. Shares are currently at their 52-week highs and the bold investor has more than made back his investment.

Another natural gas industry player that has attracted attention based on recent speculation is the Oklahoma-based Williams Companies (NYSE: WMB). Shares in the Tulsa, OK-based company have been declining in recent trading, alongside the rest of the sector, but according to Forbes one options player expects shares to increase significantly by November expiration. A bullish strategist initiated a ratio call spread, purchasing 5,200 calls at the November $32 strike at a premium of $2.04 each, and selling 10,000 calls up at the November $40 strike for a premium of $0.41 apiece. Similar to the Cheniere Energy situation, the investor will profit handsomely should WMB add 9.4 percent before expiration.

Less optimistic, are forecasts for El Paso (NYSE: EP) analysts by Tudor Pickering Holt, whose analysts initiated coverage of the pipeline and natural gas production firm with an accumulate rating.  Tudor’s Brad Olsen, David Heikkinen and Jessica Chipman attributed the company with a price target of $23 a shares and spoke out negatively on the potential split of the company alongside rumors of a potential dismantling the firm.