BP completes deal to begin new joint venture with Rosneft

(ShareCast News) - BP has acquired a 20% stake in an Eastern Siberia oil business with Rosneft as the Russian state-controlled oil group looks to further explore and develop one of the largest oil and gas condensate fields in the region.Taas-Yuryakh Neftegazodobycha LLC is already has 50 producing wells that deliver roughly 2,500 tons of crude every day and its massive Srednebotuobinskoye field in the Sakha Republic in Yakutia has reserves toalling 167m tons of liquid hydrocarbons and 180.5bn cubic metres of gas.In June BP agreed the joint venture deal and paid a $150m deposit.The joint venture, to which Rosneft plans to add a third partner, will continue further development of the field and undertake the development of suitable infrastructure for further exploration and development of the region's reserves.BP has a long history with Rosneft and is the owner of a 19.75% stake in the Kremlin-controlled company since being bought out of their last joint venture, the highly profitable TNK-BP alliance, in 2013.Rosneft has been impelled to cosy up again with its old British partner, having been hit by the rouble's fall and Western sanctions imposed on Russia in the wake of its anexing of Crimea, which have starved it of capital and put restrictions on the export of hi-tech equipment for extracting fossil fuels. BP will help pay for expansion of local infrastructure and boosting production capacities of these Eastern Siberian fields. David Campbell, president of BP Russia, said management believed the joint venture offers opportunities to increase productivity of the existing field and to discover new fields, as well as reinforcing its commitment "as a long term strategic investor in Russia".Rosneft chairman Igor Sechin said the Russian company saw "ample potential for the expansion of this project as well as for development of our activities in nearby license blocks"."We hope for integrated cooperation in the development of Eastern Siberia's reserves together with our strategic partner and shareholder, BP."