LONDON (Alliance News) - BP PLC and Russian state-owned oil company Rosneft Friday formed a new joint venture to explore for prospective resources within two basins in Russia with work expected to start in the winter season of 2016 to 2017.
The pair, which already have a long-standing relationship, will call the new venture Yermak Neftegaz LLC, with BP owning 49% and Rosneft holding the other 51%, after the pair signed final and binding agreements at the St Petersburg International Economic Forum.
BP has committed to contributing USD300.0 million to fund costs that will be incurred by the new joint venture company whilst Rosneft will contribute the licences that will be explored and a subsidiary which will carry out the initial drill work.
The venture will primarily focus on exploring two onshore mutual areas of interest in the West Siberian and Yenisey-Khatanga basins of Russia covering a combined area of around 260,000 square kilometres.
Initially, the venture will carry out further appraisal work on the 2009 Rosneft-discovered Baikalovskiy field inside the Yenisey-Khatanga basin and on exploration of Zapadno-Yarudeiskoye, Kheiginskoye and Anomalnoye licenses in the West Siberian area.
Exploration work will include regional research, acquisition of seismic data and drilling of exploration wells, with the beginning of field works anticipated in the winter season of 2016 to 2017.
In November last year, the pair formed a joint venture to develop one of the largest fields in Eastern Siberia, the Srednebotuobinskoye oil and gas condensate field, with BP owning a 20% stake of that venture whilst Rosneft holds the other 80%.
The Srednebotuobinskoye oil and gas condensate field is located in the Sakha Republic, Yakutia, and has reserves of around 167.0 million tonnes of liquid hydrocarbons and 180.5 billion cubic metres of gas.
BP also holds a 20% stake in Rosneft at a corporate level and receives about 1.0 million barrels of oil equivalent per day from its investment in the Russian firm.
BP shares were trading up 1.8% to 371.40 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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