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BP p.l.c. (BP) - free report >>
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BP and Rosneft to Form Yermak Neftegaz LLC Joint Venture
BP plc (BP - Free Report) and Russian oil major Rosneft have inked a final binding agreement at the St Petersburg International Economic Forum (“SPIEF”) to form a new joint venture (JV) – Yermak Neftegaz LLC.
The new JV will explore the West Siberian and Yenisey-Khatanga basins in the Russian Federation.
With special emphasis of two Areas of Mutual Interest (AMIs) in the West Siberian and Yenisey-Khatanga basins, the JV will conduct onshore exploration on a total combined area of about 260,000 square kilometers.
Rosneft will have a stake of about 51% in Yermak Neftegaz, while BP will hold 49%.
BP PLC Price
BP PLC Price | BP PLC Quote
Initially, the JV will continue to evaluate the Baikalovskiy field inside the Yenisey-Khatanga AMI that Rosneft discovered in 2009. It will also carry out exploration of Zapadno-Yarudeiskoye, Kheiginskoye and Anomalnoye licenses in the West Siberian AMI.
The aforesaid exploration activities will involve regional research, gathering seismic data and drilling exploration wells. In 2015, the preliminary agreement for this project was inked at SPIEF, while the field work is projected to begin in the winter of 2016–17.
In the exploration stage, BP has committed to provide about $300 million in two phases as its contribution to the cost of the JV’s activities. The initial drilling will be carried out by Rosneft subsidiaries, while Rosneft will be responsible for licenses and operational experience in West Siberia and Yenisey-Khatanga.
The latest venture reinforces BP’s commitment to strengthen its ties with Russia and its long-term partnership with Rosneft. In the current low oil price environment, the company continues to look for opportunities for future growth.
BP carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are CVR Refining, LP , FutureFuel Corp. (FF - Free Report) and ReneSola Ltd. (SOL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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