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Rosneft, BP ink gas pact

Written by  Monday, 05 June 2017 22:00
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UK-based BP has signed a deal with Russian oil major Rosneft for the supply of additional Russian gas supplies to European markets starting from 2019.

According to the agreement, Rosneft and BP’s wholly-owned subsidiary, BP Gas Marketing, will enter into a long-term sale and purchase agreement for the delivery of natural gas produced by Rosneft.

In addition, the duo will partner to develop integrated cooperation in gas and aim to jointly implement gas projects in Russia and abroad focused on gas exploration and production, liquefied natural gas (LNG) production, supply, and marketing.

President of BP Russia David Campbell said 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,” he said.

Rosneft CEO Igor Sechin said the firm intends to further increase gas production levels in the coming years. “Cooperation with BP would 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,” he added.

The BP-Rosneft pact, which was signed at the 21st St Petersburg International Economic Forum on 2 June, also saw Rosneft sign other energy cooperation agreements at the event, expanding foothold in Asia.

The Russian giant inked a deal with Thai oil company PTT Public Co. for the long-term supply of 200 MMT oil till 2037. This partnership will allow Rosneft to tap into one of the most attractive, energy-hungry markets in the Asia-Pacific region.

Moreover, both companies plan to jointly conduct studies to identify business opportunities in the areas of upstream, downstream, LNG, trading, as well as natural gas preparation, storage, and logistics.

Rosneft signed an agreement with PNOC Exploration Corp. (PNOC-EC), a state-owned Philippine national oil company, for the development of multilateral cooperation in oil and products trading, in addition to joint participation in oil refining projects.

Both companies are looking to sign a long-term contract in the near future for the delivery of Russian crude oil to PNOC-EC. 

Image: BP and Rosneft agreement signing / Rosneft

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