Rosneft and BP today signed a framework agreement on strategic cooperation during the World Economic Forum in Davos.
This agreement is signed in continuation of Rosneft and BP announcement to form strategic alliance to jointly explore and develop hydrocarbon resources of the Russian Arctic. The document includes several additional initiatives, such as plans for joint projects in international markets, approaches to accelerating technology cooperation and establishment of joint experience-sharing and training programs.
Igor Sechin, Deputy Prime Minister, who attended the signing ceremony, said “Rosneft and BP have already made significant progress – just a two weeks after our signing ceremony in London, the companies define priority areas for cooperation. These joint efforts may establish a solid foundation to contribute to the growth of the entire Russian economy over the next 20 to 30 years. The agreement again confirms our commitment to openness and our vision of the Russian oil and gas sector as a part of a single global energy market.”
Cooperation between Rosneft and BP started in 1998 when the companies formed an alliance to carry out prospecting and exploration on the Sakhalin shelf. In October 2010, Rosneft reached an agreement on the acquisition of 50% in Ruhr Oel GmbH, an owner of stakes in four refineries in Germany. The other 50% in the company is owned by BP.
Rosneft and BP have been jointly studying development prospects on the Arctic shelf since 2006. On 14th January 2011, the companies announced in London a global strategic alliance between Rosneft and BP. The partnership is based on mutual cross-holding of shares: according to the deal, in exchange for 9.5% of its shares Rosneft is to receive 5% of BP shares. (At present BP already owns 1.25% of Rosneft shares which it acquired in the course of Rosneft’s IPO in 2006).
Additionally, Rosneft and BP agreed on setting up a joint venture focused in geological exploration and further development at three prospective oil and gas areas on the shelf of the Kara Sea. Rosneft is to have a 66.7% stake in this JV, BP – 33.3%. The companies also agreed to establish an Arctic technology center in Russia, which will join hands with leading research institutes and design companies with the aim of developing and introducing advanced technologies for safe development of hydrocarbon resources of the Arctic region.