Working in Russia

BP has been working in Russia for 25 years in collaboration with leading Russian oil and gas companies.

BP first opened its representative office in Moscow in 1990. In 1997, it purchased a 10 per cent stake in Sidanco, then Russia’s 4th largest oil company. The stake was subsequently increased to 25 per cent plus one share in 2002.

In 2003, BP merged its interests in Russia with those of TNK to create TNK-BP, a successful joint venture employing around 50,000 people and operating in nearly all of Russia’s major hydrocarbon regions.

TNK-BP went on to become Russia’s third biggest vertically integrated oil and gas company, generating more than $55 billion of net profit in 2003 - 2012. TNK-BP’s production rose by over 40% in nine years and proved SEC reserves grew by more than 30% from end 2003 to end 2012.

These results were achieved through the introduction of advanced technologies and processes by BP technical specialists. Over the history of TNK-BP, the joint venture generated around $19 billion of net dividends for BP's shareholders, while paying more than $190 billion in taxes and duties to the Russian Federation.

These achievements are a testament to the powerful partnership of BP and experienced Russian oil and gas professionals working together.

On 1 June 2012, BP announced its intention to pursue a sale of its shareholding in TNK-BP.

Almost five months later, on 22 October 2012, BP signed Heads of Terms to sell its 50 per cent share in TNK-BP to Rosneft.

On the 22nd of November 2012 the Russian Federation approved BP’s acquisition of 5.66% of Rosneft from the Russian state. On the same day, BP signed binding Sales and Purchase Agreements with Rosneftegaz and Rosneft for the sale of BP’s 50 per cent interest in TNK-BP to Rosneft and BP’s acquisition of additional shares in Rosneft.

The deal was completed on 21 March 2013. BP received cash (approximately $12.5 billion) and shares (18.5% of Rosneft) in consideration for its 50% stake in TNK-BP. This resulted in BP holding 19.75 per cent of Rosneft stock, when aggregated with BP’s 1.25 per cent pre-deal holding.

Through its significant shareholding in Rosneft BP will maintain prominent exposure to the world’s largest (based on production volume) listed oil company and the biggest oil producing nation. Strategically, BP and Rosneft gain from the opportunity for deeper strategic and technological cooperation as well as potential joint venture collaborations with Rosneft.

In May 2014 during St. Petersburg International Economic Forum Rosneft and BP signed a Heads of Agreement on exploration and possible development of Domanik formations in the Volga-Urals region, which provides for implementation of a joint pilot project and, in the event of success, development of unconventional resources.  

On June 27, 2014, Rosneft and BP signed a set of agreements designed to organize long-term deliveries of oil products and crude oil on a pre-paid basis. The terms of transaction provide for export deliveries of oil products with possible substitution with crude oil of up to 12 million tons within 5 years on a pre-paid basis in an amount of not less than 1.5 billion dollars.  A number of world's leading financial institutions participated in the organization of advanced payment. 

In June 2015, at the St. Petersburg International Economic Forum Rosneft and BP signed final binding agreements for Rosneft’s sale to BP of a 20 per cent share of Taas-Yuryakh Neftegazodobycha, creating a new joint venture in East Siberia. The venture will further develop the Srednebotuobinskoye oil and gas condensate field which is one of the largest fields in eastern Siberia. Rosneft and BP will also jointly undertake the exploration of an associated Area of Mutual Interest (AMI) in the region, covering approximately 115,000 square kilometres. The two companies have also agreed jointly to explore two additional AMIs in the West Siberian and Yenisey-Khatanga basins. Within the framework of the Forum, Rosneft and BP also signed a heads of terms to pursue a reorganization of the German Ruhr Oel GmbH (ROG) refining joint venture. For details, see our joint press release. 

On November 30, 2015, Rosneft and BP announced the completion of the transaction to sell 20 per cent share of Taas-Yuryakh Neftegazodobycha LLC to BP.

At the XX St. Petersburg International Economic Forum on June 17, 2016, Rosneft and BP signed final binding agreements to create a new joint venture, Yermak Neftegaz LLC, which will focus on onshore exploration of two AMIs in the West Siberian and Yenisey-Khatanga basins covering a combined area of about 260,000 square kilometers. The deal was completed on October 31, 2016. 

Yermak Neftegaz is owned 51 per cent by Rosneft and 49 per cent by BP. Beginning in winter season of 2016-17, the joint venture will carry out further appraisal work by starting the drilling of the Bkl-21 well on the 2009 Rosneft-discovered Baikalovskiy field inside the Yenisey-Khatanga AMI and will commence seismic surveys of the Zapadno-Yarudeiskoye block in the West Siberian AMI. The joint venture will also conduct geological exploration of the Kheiginskoye and Anomalnoye licenses in the West Siberian AMI.

Before the completion of the deal the JV partners took a decision to participate in an auction for two E&P license blocks in Krasnoyarsk region - Verknekubinskiy and Posoyskiy, located within the Yenisey-Khatanga AMI. On October 28, 2016 Yermak Neftegaz LLC won the auctions for both exploration and production licenses. 

Exploration activities in the two AMIs will include regional studies, acquisition of seismic data and drilling of exploration wells. BP has committed to provide up to $300 million in two phases as its contribution to the cost of the JV’s activities at the exploration stage. Rosneft will contribute licenses and operational experience in West Siberia and Yenisey-Khatanga with initial drilling to be performed by Rosneft subsidiaries.

On September 2, 2016, during the Eastern Economic Forum (EEF) in Vladivostok Rosneft, BP and Schlumberger announced agreements for collaboration on seismic research and development. Rosneft will join as an equal partner in BP’s ongoing project with Schlumberger’s seismic business, WesternGeco, to develop innovative cableless onshore seismic acquisition technology. The technology aims to revolutionize the design and acquisition of 2D and 3D seismic surveys, which in turn will improve subsurface imaging and the efficiency of exploration, appraisal and field development. The ability to deliver faster and better quality seismic data acquisition at lower cost compared to conventional seismic surveys will also bring environmental and safety benefits in difficult to access areas and extreme climates.

The project envisages an initial two-year period to complete the development of a seismic acquisition system. BP and Rosneft will have preferential access to this technology for an initial period, after which Schlumberger will have the exclusive rights to market the system.

At the XXI SPIEF on June 2, 2017, Rosneft and BP signed an agreement on strategic cooperation in gas and a Memorandum of Understanding (MoU) in respect to the sale and purchase of natural gas in Europe.

On December 21, 2017 Rosneft and BP announced that they have agreed to develop subsoil resources within the Kharampurskoe and Festivalnoye licence areas of the Yamalo-Nenets Autonomous Okrug in northern Russia, with total geological reserves exceeding 880 bcm of gas. The project envisages the development of the traditional gas reserves of the Cenomanian deposit, pilot production and subsequent full-scale development of the Turonian deposit as well as oil production optimization and efficiency.

Rosneft will hold a majority stake of 51% and BP will hold 49%. Produced oil and gas will be marketed by Rosneft. Completion of the deal will be subject to a number of regulatory approvals.

BP’s commitment to Russia goes beyond the development of oil and gas reserves. In line with its global practice BP views corporate social responsibility an integral part of its business in Russia. BP’s overall support of the local social, cultural, educational and charity projects has been the largest among foreign companies operating in Russia.

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Taas-Yuryakh project

Special report by television channel Rossiya 24