Rosneft and BP have put pen to paper on a deal to cooperate on the sale and purchase of natural gas in Europe.
Signed at the ongoing St Petersburg International Economic Forum, the deal will see the companies coordinate activities around the implementation of projects in Russia and across the region, focussing on gas exploration and production, LNG production, supply and marketing.
The marketing deal in particular will see Rosneft and BP subsidiary BP Gas Marketing Limited enter into a long-term agreement to deliver increased supplies of Rosneft gas into European markets, beginning in 2019.
"Rosneft already is the largest independent gas producer in Russia and intends to further increase production levels in the coming years," Rosneft CEO Igor Sechin said.
"Cooperation with BP will provide Rosneft with both a new efficient gas monetization channel and the conditions required for the development of a new resource base, including hard to recover gas reserves."
"BP is pleased to expand its ongoing relationship with Rosneft through this agreement," President of BP Russia David Campbell added.
"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 add, however, that support from the Russian state in ensuring an effective gas supply mechanism will be critical to their success.