Rosneft, BP To Develop N Russian Fields

Russian state oil company Rosneft and UK BP have agreed to implement a joint project to develop and enhance the recovery rate of the Kharampur and Festival gas fields in the arctic Yamal-Nenets autonomous district, Rosneft said December 21. Their combined in-situ resources are 880bn m³. Subject to regulatory approval, Rosneft will retain a majority stake of 51% and be the commercial operator.

Rosneft had projected in 2013 that production from Kharampur would reach 24bn m³ by 2018. No information has been published about Festival field. Rosneft CEO Igor Sechin said the participant companies are making joint efforts to develop new complex fields, including those containing hard-to-recover gas, such as tight gas. There, BP has proven expertise: in November it brought onstream the Khazzan field in Oman.

He said the agreement was "an important step forward in the development of global gas co-operation between Rosneft and BP. Rosneft and BP will make joint efforts to develop new deposits, including those containing tight gas. Our companies have all the necessary competencies and experience to effectively implement such complicated projects."

BP has been working with Rosneft in since 2012. Rosneft plans to increase its gas production by about 50% to 100bn m³ by 2022 and the two are hoping to develop export markets in Europe.

Samuel Lussac, research manager at consultancy Wood Mackenzie said: "Rosneft continues to lobby for access to gas export markets, whether in China or Europe, and partnership with BP at Kharampur will add further leverage to the company's efforts to secure export prices for its gas. This deal shows BP is willing and able to leverage its 19.75% stake in Rosneft to access a challenging gas project in Russia."