Joint ventures being set up to serve as operators for Russian offshore projects

Mutual guarantees agreements signed

Rosneft and Eni S.p.A. have today signed agreements ensuring practical implementation of a Cooperation agreement concluded in April 2012. The documents were signed by Rosneft President Igor Sechin and Eni CEO Paolo Scaroni at the St Petersburg International Economic Forum.

The shareholder and operations agreements signed by the parties provide for the creation of joint ventures to develop Russian offshore properties at license blocks in the Barents and Black Seas. The agreements concern the Central Barents, Fedynsky and Western Chernomorsky blocks. The parties also signed Agreements on parent company guarantees ensuring the timely fulfillment of all obligations by their respective subsidiaries.

Rosneft and Eni will set up the joint ventures through their subsidiaries with Rosneft holding 66.67% and Eni 33.33%.

Eni undertakes to cover all the costs related to fulfilling license obligations related to geological exploration on carry financing terms. Eni will also compensate 33.33% of license acquisition costs for each project. It is also agreed that Eni will reimburse major part of historical exploration expenses at Western Chernomorsky block.

Background:

The Barents Sea projects will involve the Fedynsky and the Central Barents license blocks. The two blocks' possible recoverable resources are estimated at 2 bln tonnes of oil and 1.9 trillion cubic meters of gas. 2D seismic surveying at each block is scheduled to start in 2013 with 3D seismic planned for 2015-2016. Under the terms of the licenses two exploration wells have to be drilled in 2019-2020.

The Black Sea project will involve the Western Chernomorsky license block. Its recoverable resources are estimated at 1.4 bln tonnes of oil. 2D (4,495 linear km) and 3D (3,319 sq km) seismic works were carried out at the block between 2004 and 2011. Two exploration and appraisal wells are to be drilled in 2015-2016 in line with license terms.