Rosneft-BP: Global and Arctic Alliance

January 14, 2011

 Russia – The world’s largest oil and
hydrocarbon producer

Russia is the world’s largest oil and gas producer Rosneft and BP, through TNK-BP, are leading oil
producers in Russia

20
3,000 
18
2,500 
Production (mmboepd)

16
14 2,000 
12

kboepd
10 1,500 
8
6
1,000 

BP
4
500 
2
0 ‐

Rosneft

Hess
Sinopec
ExxonMobil

Chevron
Shell
LUKoil

ConocoP
Mitsui 
Wintershall

Mitsubishi
E.ON

Eni
TNK‐BP

MOL
ONGC

Total
Source: BP 2010 Statistical Review Source: WoodMackenzie
 BP and Rosneft are forming a global
strategic alliance
A unique alliance unlocking future growth potential for both BP and Rosneft

Arctic exploration agreement Wider Arctic

focused on South Kara Sea protocol

A leading German
refining
partnership via
50:50 ROG JV

Exploration
offshore Sakhalin

International
upstream Significant share
collaboration swap
 Strategic Alliance: Key Points

Major Arctic Project

• Creation of a world-class joint exploration program in the Russian South

Kara Sea, one of the most prospective unexplored basins in the world
− BP and Rosneft will explore three licence areas (EPNZ-1, EPNZ-2
and EPNZ-3),
− The area covers 125,000 km2 and in water depths which are
relatively shallow
− The area has roughly the size and prospectivity of the UK North Sea
− Rosneft was awarded the licences in late 2010
− Over the next two years, BP and Rosneft will form a joint operating
company with a 66.67% Rosneft, 33.33% BP participation
 Strategic Alliance: Key Points

Equity Swap

• First major national oil company – international oil company cross-

shareholding in the global oil and gas industry
− BP will acquire a 9.5% stake in Rosneft
− Rosneft in return will be issued new BP shares giving it a 5% stake
− BP already has a 1.3% shareholding in Rosneft and as a result of the
announced transaction, BP’s stake in Rosneft will increase to 10.8%
− BP and Rosneft view their cross shareholdings as long term and
strategic and have agreed a two year lock up period
 Strategic Alliance: Key Points
Arctic Technology Centre & International Projects

• Formation of an Arctic technology centre

− In cooperation with leading Russian and international research
institutes
− Focused on developing innovative technologies for the safe
extraction of hydrocarbons from the Russian Arctic shelf

• Leading German refining JV

• Discussion of joint international projects

• Support from Russian and UK governments

The licence area covered by BP and Rosneft
agreement can be compared to the UK North Sea –
both in size and potential

UK Central &
Northern
North Sea to
appx scale

Add North Sea overlay to scale

 A major step forward: a new model
for the oil industry

• This agreement is historic for the oil and gas industry and signals an
enhanced alliance between BP and Rosneft

• Consolidates and underpins BP’s position as the leading partner in the

Russian oil industry while addressing Rosneft’s international ambition

• The partnership demonstrates mutual confidence in value upside and

growth potential
 Notes

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