BP and Rosneft to jointly develop prospective resources in East and West Siberia

BP has signed final binding agreements with Rosneft to create a new Russian joint venture to develop prospective resources in East and West Siberia.

The new joint venture, known as Yermak Neftegaz, will focus on exploration in the West Siberian and Yenisey-Khatanga basins in the Russian Federation.

The deal has been signed between the firms at the XX St Petersburg International Economic Forum (SPIEF).

As part of this effort, BP plans to invest up to $300m in the joint venture while Rosneft will contribute licenses and operational experience in West Siberia and Yenisey-Khatanga. Initial drilling will be performed by Rosneft subsidiaries.

Rosneft CEO Igor Sechin said: "These agreements serve as an example of full scale cooperation with BP, Rosneft’s strategic partner and largest minority shareholder.

"After creation of the Taas-Yuryakh Neftegazodobycha LLC joint venture we are now broadening the geography of our cooperation and creating a precedent which allows us to pursue cooperation in partnership with leading international companies to implement upstream projects at the largest Rosneft greenfield sites in West and East Siberia."

Additionally, Yermak Neftegaz will undertake onshore exploration of two areas of mutual interest (AMIs) in the West Siberian and Yenisey-Khatanga basins. This will cover a combined area of about 260,000km².

Rosneft has 51% stake in Yermak Neftegaz while BP owns the remaining 49% interest.

The joint venture will initially undertake appraisal work on the Baikalovskiy field inside the Yenisey-Khatanga AMI. The field was discovered by Rosneft in 2009.

Yermak Neftegaz will also carry out exploration of Zapadno-Yarudeiskoye, Kheiginskoye and Anomalnoye licenses in the West Siberian AMI.

Exploration activities 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 2016/2017.

BP Russia president David Campbell said: "This agreement and creation of a new joint venture reinforces BP’s commitment to our strategic investment in Russia and our long term partnership with Rosneft.

"In the current low oil price environment we continue to look for opportunities for future growth."