Rosneft and BP have signed final binding agreements to create a new joint venture, Yermak Neftegaz, to conduct exploration in the West Siberian and Yenisey-Khatanga basins in the Russian Federation. The document was signed at the St. Petersburg International Economic Forum (SPIEF) by Rosneft CEO Igor Sechin and President of BP Russia David Campbell.
The joint venture will focus on onshore exploration of two areas of mutual interest (AMIs) in the West Siberian and Yenisey-Khatanga basins, covering a combined area of about 260,000 sq km. Yermak Neftegaz will be owned 51% by Rosneft and 49% by BP. In the initial stage, the joint venture will carry out further appraisal work on the 2009 Rosneft-discovered Baikalovskiy field inside the Yenisey-Khatanga AMI and on exploration of Zapadno-Yarudeiskoye, Kheiginskoye and Anomalnoye licenses in the West Siberian AMI.
Exploration activities in the two AMIs 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. The preliminary agreement relating to this project was signed at SPIEF in 2015.
“These agreements serve as an example of full-scale cooperation with BP, Rosneft’s strategic partner and largest minority shareholder,” Mr Sechin said. “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.”
“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,” Mr Campbell said. “In the current low oil price environment, we continue to look for opportunities for future growth.”
BP has committed to provide up to $300 million in two phases as its contribution to the cost of the JV’s activities at the exploration stage. Rosneft will contribute licenses and operational experience in West Siberia and Yenisey-Khatanga, with initial drilling to be performed by Rosneft subsidiaries.