Rosneft and BP Friday signed a legally binding deal to set up a joint venture, Ermak Neftegaz, that will focus on geological exploration in West Siberia and the Yenisey-Khatanga basin in East Siberia, in a move that deepens the cooperation between two global majors.
Rosneft CEO Igor Sechin and BP president Russia David Campbell signed the deal at the St Petersburg International Economic Forum (SPIEF).
The deal will strengthen Rosneft's cooperation with its "strategic" partner BP, which holds a 19.5% stake in Russia's top crude producer and already partners with it in the Taas-Yuryakh Neftegazodobycha JV, Sechin said in a statement.
"We are now broadening the geography of our cooperation and creating a precedent which allows us to pursue cooperation in partnership with leading international companies to implement upstream projects at the largest Rosneft greenfield sites in West and East Siberia," Sechin said in the statement.
Campbell sees the agreement as a reinforcement of BP's commitment to its "strategic investment in Russia" as it continues to seek opportunities for future growth even in the current low oil price environment.
Rosneft will hold 51% in the new JV, with BP owning 49%, Rosneft said.
BP will invest $300 million in two phases of exploration, while Rosneft will perform initial drilling through its subsidiaries, it said.
Exploration under the JV will start in the 2016-17 winter season, and will include regional research, seismic exploration and drilling of exploration wells, Rosneft said.
The area covered by the deal stretches along 260,000 sq km, Rosneft said.
In the initial stage, the joint venture will carry out further appraisal work on the Baikalovskiy field in the Yenisey-Khatanga area of mutual interest (AMI) and on exploration of the Zapadno-Yarudeiskoye, Kheiginskoye and Anomalnoye licenses in the West Siberian AMI, Rosneft said.
