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Petroleum News: BP, Rosneft sign for JV in Russian Arctic

Week of December 10, 2006

Russian state-controlled oil company OAO Rosneft said Nov. 30 it had signed an agreement with BP PLC to work together in developing energy projects in Russia’s Arctic region.

The companies will work together to obtain exploration and production licenses in the far north, where Rosneft already has subsidiaries operating and where it plans to expand. Rosneft has also said it plans to bid for the Trebs and Titov fields, which hold some of the largest crude oil reserves in the region. Russia’s biggest oil producer, OAO Lukoil, has also said it would bid for the two fields.

BP — which has a major joint venture project with Russian company TNK — paid $1 billion for shares in Rosneft’s initial public offering in July, a move that was seen by many observers as an attempt to improve relations with the Kremlin-friendly company and smooth its expansion into Russia.

Foreign energy companies have come under increased scrutiny by Russian regulators in recent years, which analysts have speculated is part of a drive by the Kremlin to assert greater control over the energy sector.

—The Associated Press

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