BP has agreed to form a joint venture with Russia’s Rosneft to explore and develop three of the company’s offshore exploration blocks, EPNZ 1, 2 and 3, in northern Russia. These licenses were awarded to Rosneft in 2010 and cover about 30 million acres (125,000 square kilometers) in a highly prospective area of the South Kara Sea, stated BP.
Following completion of the agreement, Rosneft will hold 5% of BP's ordinary voting shares in exchange for around 9.5% of Rosneft's shares. The share swap component of the alliance is designed to create the alignment to pursue joint projects. The joint venture has also agreed to develop an Arctic technology center in Russia to work with Russian and international research institutes, design bureaus and universities to develop technologies and engineering practices for the safe extraction of hydrocarbon resources from the Arctic shelf, claims BP.
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