BP–Rosneft Deal: Beyond Energy

Ariel Cohen / January 19, 2011

On January 15, British Petroleum (BP) agreed to form a joint venture with Russia’s state-owned Rosneft to develop three of Rosneft’s offshore exploration blocks in northern Russia. The two companies will jointly explore for oil and gas in the Russian Arctic, one of the world’s last remaining unexplored hydrocarbon basins. Rosneft will receive BP shares equivalent to a 5 percent stake, valued at $7.8 billion, while BP will receive a 9.5 percent stake in Rosneft, in addition to the 1.3 percent it already owns.

Hailed by First Deputy Prime Minister Igor Sechin, Putin’s key ally, the deal is a ground-breaking step in the global oil market and makes Russian state-owned giant Rosneft, which Sechin chairs, the single largest BP shareholder. (more…)