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Rosneft and ВР to Cooperate at Sakhalin Island

Lord Browne and Sergey Bogdanchikov signed a joint statement.jpg

On November 22 Rosneft and BP signed Shareholder and operating agreements for joint activity on the East-Schmidt (Sakhalin-5) and the West-Schmidt (Sakhalin-4) licence blocks.

Projects are implemented under the effective legal framework between Rosneft (51%) and BP (49%). Operational management of the projects will be conducted by CJSC Elvary Neftegas established in 2003 for exploration on the Kaigansko-Vasuykansky licence block (Sakhalin-5). It is planned that exploration activities on both blocks including drilling of 6 wells will be financed by BP until commerciality is confirmed; following commercial discovery the expenses will be reimbursed from Rosneft's share of production.

Subsoil users of the blocks are two 100% Rosneft subsidiaries CJSCs "Vostok Schmidt Neftegas" and "Zapad Schmidt Neftegaz".

Exploration on the blocks and design of the joint development strategy on Sakhalin-4 and Sakhalin-5 are being conducted by the parties. Set up of joint production and transportation infrastructure will allow optimisation of the projects' capex and may support the creation of the island's biggest oil and gas complex in the North Sakhalin.

Management of the companies believes BP's considerable offshore knowledge combined with more than 75 years of Rosneft's experience in Sakhalin would allow the most effective use of modern technologies and compliance with health, safety, security and environmental requirements.

Lord Browne and Sergey Bogdanchikov signed a joint statement expressing satisfaction with the achieved agreements that open up new opportunities for both companies at the next stage of their cooperation.

"These agreements are the major step in the ongoing cooperation of our companies offshore Sakhalin" - the announcement says. "We would like to congratulate employees of Rosneft and BP who worked on the agreements and wish them every success in 2007 and in the future".

© SeaNews

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