The agreement aims to create the first major equity-linked partnership between a national and international oil company. Following completion of this agreement, Rosneft will hold 5% of BP’s ordinary voting shares in exchange for approximately 9.5% of Rosneft’s shares. The share swap component of the alliance creates strategic alignment to pursue joint projects and demonstrates mutual confidence in the growth potential of both companies.
In the framework of this agreement, Rosneft and BP have also agreed to explore and develop three license blocks - EPNZ 1,2,3 – on the Russian Arctic continental shelf. These licences were awarded to Rosneft in 2010 and cover approximately 125,000 square kilometres in a highly prospective area of the South Kara Sea. This is an area roughly equivalent in size and prospectivity to the UK North Sea. BP and Rosneft have also agreed to establish an Arctic technology centre in Russia.