BP and Russian oil firm Rosneft have signed an agreement to explore and develop three offshore license blocks - EPNZ 1,2,3 on the Russian Arctic continental shelf.

These licences, which cover 125,000sq km in an area of the South Kara Sea, were awarded to Rosneft in 2010.

After the completion of this agreement, BP will swap 5% of its shares, valued at $7.8bn, for 9.5% shares of Rosneft.

BP and Rosneft have also signed an agreement to construct an Arctic technology center in Russia for development of technologies and engineering practices for the safe extraction of hydrocarbon resources from the Arctic shelf.

The technology center will work with Russian and international research institutes, design bureaus and universities.

Rosneft and BP have agreed to continue their joint technical studies in the Russian Arctic to assess hydrocarbon prospectivity in areas beyond the Kara Sea.

The parties will also seek additional opportunities for international collaboration beyond their 50/50 joint venture partnership in Ruhr Oel, a refining joint venture in Germany (subject to completion of Rosneft’s recent purchase of 50% of Ruhr Oel from PDVSA).