Daily Management Review

BP Completes Formalities for New Joint Venture with Rosneft


11/30/2015




BP Completes Formalities for New Joint Venture with Rosneft
With the Russian state-controlled oil group Rosneft looking to further explore and develop one of the largest oil and gas condensate fields in the Siberian region and is on the lookout for financing, it has got a partner in the form of BP that has acquired a 20% stake in Rosneft’s Eastern Siberia oil business.
 
The Russian state owned oil group, Taas-Yuryakh Neftegazodobycha LLC, already has a massive Srednebotuobinskoye field in the Sakha Republic in Yakutia that has reserves totaling 167m tons of liquid hydrocarbons and 180.5bn cubic metres of gas and already has 50 producing wells that deliver roughly 2,500 tons of crude every day.
 
In June BP agreed the joint venture deal and paid a $150m deposit.
 
Rosneft has plans ot add a third partner to the joint venture and together they would continue further development of the field and undertake the development of suitable infrastructure for further exploration and development of the region’s reserves.
 
BP and Rosneft’s association goes back a long way with BP owning 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.
 
Having been hit by the rouble's fall and Western sanctions imposed on Russia in the wake of its anexing of Crimea Rosneft has been impelled to cosy up again with its old British partner. The Western sanctions have starved the Russian oil giant of capital and put restrictions on the export of hi-tech equipment for extracting fossil fuels.

Expansion of local infrastructure and boosting production capacities of these Eastern Siberian fields would be conducted by BP.
 
The BP 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" said David Campbell, president of BP Russia.
 
“The new joint venture reinforces BP’s commitment as a long term strategic investor in Russia,” Campbell said.
 
"Ample potential for the expansion of this project as well as for development of our activities in nearby license blocks," Rosneft chairman Igor Sechin said.
 
"We hope for integrated cooperation in the development of Eastern Siberia’s reserves together with our strategic partner and shareholder, BP," Sechin said.
 
In a statement BP said that the tie up within the project will contribute to expanding local infrastructure and boosting production capacities of these Eastern Siberian fields, one of the key regions of Rosneft’s business.
 
(Source:www.digitallook.com & www.energyvoice.com)