Rosneft and ITERA Group have closed a deal to create a joint venture on the basis of ITERA Oil and Gas Company to produce and sell gas in line with the terms of a strategic cooperation agreement signed on 28 February 2012. Rosneft obtained 51% in the joint venture in exchange for a 100% stake in the charter capital of Kynsko-Chaselskoye Neftegaz (which owns the license for the Kynsko-Chaselsk license block) and a cash consideration of $173.4 million. This sum may be adjusted following an analysis of the financial results of ITERA Oil and Gas Company, its subsidiaries and affiliates and Kynsko-Chaselskoye Neftegaz as of the deal completion date.

The joint venture’s consolidated proved and probable (2P) reserves under international classification will total 372.4 billion cubic metres of gas and 15.7 million tonnes of liquid hydrocarbons. The JV’s forecast gas output in 2013 is approximately 13 billion cubic metres. Rosneft President Igor Sechin said of the deal: “Combining the gas assets of the two companies into a joint venture opens up new opportunities to monetize gas and ensure the implementation of Rosneft’s strategic programme to begin developing sizeable gas reserves.”