BP Share News (BP.)

Oil giant BP has been awarded four deepwater blocks off the coast of south Australia.BP said that it will explore Exploration Permit for Petroleum (EPP) areas EPP 37, EPP 38, EPP 39 and EPP 40 covering an area of 24,000 square kilometres for oil and gas reserves, with the right to develop any commercially viable discoveries.The blocks are in the Ceduna Sub Basin within the Great Australian Bight."Our experience tells us that the geology has a high potential for containing hydrocarbons," said Dr. Phil Home, managing director of BP's Australian upstream oil and gas business.The proposed exploration activity is to be phased over six years and, as part of the regulatory approval process, is subject to detailed environmental assessment.In a separate announcement BP confirmed it has agreed with state-owned Russian oil producer Rosneft to explore and develop three license blocks, EPNZ 1,2 & 3, on the Russian Arctic continental shelf. These licences were awarded to Rosneft in 2010 and cover around 125,000 square kilometres in a highly prospective area of the South Kara Sea.As part of the deal, BP will issue shares to the value of around $7.8bn to Rosneft, giving the Russian company a stake of about 5% in BP. In exchange, BP will receive a shareholding of about 9.5% in Rosneft, taking its stake up to 10.8%.BP and Rosneft have agreed to establish an Arctic technology centre in Russia which will work with leading Russian and international research institutes, design bureaus and universities to develop technologies and engineering practices for the safe extraction of hydrocarbon resources from the Arctic shelf. "This project is unique in its complexity and scale both for Russia and the global oil and gas industry. We see it as the next step in developing our relations with BP," said Rosneft's president, Eduard Khudainatov.The alliance was welcomed by broker Panmure Gordon, which described it as " an exciting move for BP." "With this deal , BP will bring the expertise that it has developed in Alaska (US), the Beaufort Sea (Canada) and Northern Siberia (Russia). By getting into bed with Rosneft, the group is able to get access to this exciting new acreage and obtains first move advantage. With it becoming more difficult to operate in the US Gulf of Mexico, following the Macondo incident, the company has decided that it will look towards Russia to fuel its future growth," the broker said. "The only negative is that the issue of new shares are likely to be mildly dilutive to earnings, given that BP will only be able to book the dividend it will receive from Rosneft," the broker added.