BP and Russia’s Rosneft sign landmark Arctic shelf oil deal

15 January 2011 15 January 2011

BonTrade

Oil giant BP and Rosneft, Russia’s leading energy company have signed a joint venture to exploit potentially huge deposits of oil and gas in Russia’s Arctic shelf.

The deal will see both BP and Rosneft exchange expertise in exploring the Arctic region for new oil reserves and as part of the deal Rosneft will take 5% of BP’s shares in exchange for approximately 9.5% of Rosneft’s company shares. The deal follows a meeting between BP’s boss Bob Dudley and Russian PM Vladmir Putin on Friday.

Oil exploration will be split into in three areas known as EPNZ 1,2,3 – on the Russian Arctic continental shelf, the areas cover 125,000 square kilometres in an area of the South Kara Sea.

“Our future joint venture will utilise the experience and expertise of BP, one of the leaders in the global oil and gas industry. This project is unique in its complexity and scale both for Russia and the global oil and gas industry.” said Rosneft’s President, Eduard Khudainatov.

New Arctic Technology Centre in Russia

BP and Rosneft have also agreed to set up an Arctic technology centre in Russia which will work with Russian and international research institutes to develop technologies for the extraction of hydrocarbon resources from the Arctic shelf.

5 Billion Tonnes of Oil Resources – Putin

“The resources of oil in question stand at 5 billion tonnes. These are serious figures that need further confirmation, but they are quite realistic and I hope that these estimated resources will become proven reserves.” said Prime Minister Vladimir Putin.

Russia is already the world’s largest oil exporter and is currently not an official member of OPEC.

Rosneft is the leader of the Russian oil industry and one of the largest public oil and gas companies worldwide.