On June 19, at the St. Petersburg International Economic Forum in Russia, Rosneft and BP signed several agreements strengthening the long-term strategic relationship between the two companies.
Rosneft and BP signed final binding agreements for Rosneft’s sale to BP of a 20% share of Taas-Yuryakh Neftegazodobycha (Taas), creating a new joint venture in East Siberia. The document was signed by Rosneft Management Board Chairman Igor Sechin and President of BP Russia David Campbell.
The venture will further develop the Srednebotuobinskoye oil and gas condensate field, which is one of the largest fields in eastern Siberia, producing about 20,000 barrels a day. The Taas venture will also undertake the development of suitable infrastructure for further exploration and development of the region’s reserves. Related to this, Rosneft and BP will also jointly undertake the exploration of an associated area of mutual interest (AMI) in the region, covering approximately 115,000 square kilometers.
Rosneft and BP have also agreed jointly to explore two additional AMIs in the West Siberian and Yenisey-Khatanga basins covering a combined area of about 260,000 square kilometers. This agreement commits BP and Rosneft to jointly conduct studies and, if successful, establish new joint ventures to obtain licenses and perform exploration activities.
Any joint ventures will be owned 51% by Rosneft and 49% by BP. As part of this agreement, Rosneft and BP will also form a joint venture to carry out further appraisal work on the 2009 Rosneft-discovered Baikalovskiy field inside the Yenisey-Khatanga AMI. Exploration activities in the two AMIs will include screening studies, acquisition of seismic data, and drilling of exploration wells as new licenses are added.
Within the framework of the Forum, Sechin and Campbell also signed a heads of terms to pursue a reorganization of the German Ruhr Oel GmbH (ROG) refining joint venture. The document envisages restructuring the joint venture by dividing between the parties shares in four refineries and associated infrastructure.
As a result of the planned deal, Rosneft will double its shareholding in the Bayernoil refinery to 25% from 12.5%; the MiRO refinery, to 24% from 12%; and the PCK Raffinerie, to 37.5% from 18.75%. In exchange, BP will consolidate 100% of the equity of the Gelsenkirchen refinery and the solvent production facility DHC Solvent Chemie. The closing of the deal is subject to the fulfillment of conditions precedent, which includes inter alia regulatory approvals.
The restructuring of Ruhr Oel GmbH will enable Rosneft and BP to refocus their refining and petrochemicals strategies in Germany.