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Rosneft and BP sign strategic cooperation agreement and MoU

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LNG Industry,

Rosneft has announced that it has signed an agreement with BP on strategic cooperation in gas, as well as a memorandum of understanding (MoU) with BP in respect to the sale and purchase of natural gas in Europe.

The agreements were signed at XXI St Petersburg International Economic Forum. Both parties agreed to develop integrated cooperation in gas and aim to jointly implement gas projects in Russia and abroad focused on gas exploration and production, LNG production, supply and marketing.

Rosneft and BP also reconfirmed their mutual interest in cooperation in European gas marketing. Under the terms of the MoU, Rosneft and BP Gas Marketing Ltd (a wholly owned subsidiary of BP) will enter into a long-term sales and purchase agreement (SPA) for the supply of natural gas provided by Rosneft in order to ensure delivery of additional Russian gas supplies to European marketing commencing in 2019. Rosneft claims that this MoU is a further milestone in the development of strategic cooperation between both parties.

The CEO of Rosneft, Igor Sechin, said: “Rosneft already is the largest independent gas producer in Russia and intends to further increase production levels in the coming years.

"Cooperation with BP would provide Rosneft with both a new efficient gas monetisation channel and the conditions required for the development of a new resource base including hard to recover gas reserves."

The President of BP Russia, David Campbell, added: “BP is pleased to expand its ongoing relationship with Rosneft through this agreement.

"Shifting to gas is one of the pillars of BP's strategy. It is important in order to meet the increasing demand for cleaner energy. Gas is a growing proportion of BP's portfolio and by the middle of the next decade we expect around 60% of our production to be gas, compared with around 50% today."

Both companies agree that Russian state support for an effect gas supplies mechanism is crucial for the successful implementation of the MoU.

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