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Rosneft Oil And BP Plc Teams Up On East Siberian Oil Field

|Includes: BP p.l.c. (BP)

Rosneft Oil And BP Plc collaborate for the development of the Srednebotuobinskoye oil and gas condensate field.

BP Plc and Rosneft Oil Corporations announce a partnership in order to develop Srednebotuobinskoye oil and gas condensate field, which is one of the biggest fields in Eastern Siberia. Rosneft has also sold 20% of shares of Taas- Yuryakh Neftegazodobycha LLC, which is its subsidiary to the British Oil giant.

The partnership between these two oil and gas companies will help them both on different levels. Since the exploration field is expected to be the largest in the region, including 167 million tons of hydrocarbons and 180.5 million cubic meters of gas in its reserves, 50 of the wells in the area have already been discovered, which produce 2.5 thousand tons each day.

The companies who are participating in these areas through the partnership are aiming to increase the output immensely of the wells. Another partner is expected to join the companies in the Srednebotuobinskoye oil and gas condensate field development. Oil and gas companies in the business have faced huge losses recently due to the decline in the prices of their products in the industry and all of them are now trying to limit risks and avoid as many losses as possible to save themselves.

The BP Russia Oil Company's president, David Campbell, said, "We look forward to working together with our partner Rosneft on this project. We believe it will offer is new opportunities to increase productivity of the existing field and to discover new fields. The new joint venture reinforces BP's commitment as long term strategic investor in Russia."

In other news regarding the oil and gas company, it faced rejection to start its operations in Great Australian Bright for exploration of oil. The NOPSEMA rejected the plan stating the reason that it was not able to fulfill the environmental regulations criteria of the agency. The company was requested to reconsider the plan and change its policies if it wants the approval to operate in the region.

The oil major planned to start the drilling by October next year but might not be able to do so due to this setback. The project would require an investment of $710 million, which is going to be very tough as it is already facing problem in generating a healthy annual profit in the industry. It will consider renewing its plans to meet the requirements of the petroleum agency, which is highly likely because the region is rich in oil and gas, and it will not let the area go just because of one setback.

BP stock is running at $34.63, going green by 0.09% currently (December 1).