Rosneft Picks Italy’s Eni For $120 Bln Offshore Projects

Russian oil giant Rosneft and Italy’s Eni will invest $70 billion in developing Barents Sea offshore deposits and $55 billion in Black Sea offshore production under a strategic partnership agreement signed by the companies on Wednesday.

“The two firms will invest $50-70 billion for full development in the Barents Sea and about $50-55 billion in the Black Sea,” according to preliminary forecasts, Rosneft President Eduard Khudainatov said.

The deal was signed by Khudainatov and Eni Board Chairman Paolo Scaroni in the presence of Russian Prime Minister and President-elect Vladimir Putin.

Eni will have a 33.3 percent share in the joint venture. The Italian company will finance geological prospecting of the offshore deposits with recoverable reserves estimated at 36 billion barrels of oil equivalent.

Under the agreement, the two companies will jointly develop the Val Shatskogo deposit in the Black Sea and the Fedynsky and Cental Barents blocks in the Barents Sea.

Rosneft will also participate in Eni’s international projects as part of the strategic partnership deal.

Investment in geological prospecting in the Barents and Black Sea will total $2 billion, Khudainatov said.

Scaroni said the two companies would also discuss in May a list of joint projects in third countries.

Khudainatov said the deal with Eni will increase the Russian company’s capitalization.

Meanwhile, as of close of business Rosneft shares cost 208.5 rubles, up only 0.1 percent.

Probiznesbank’s Yevgeny Volkov said the agreement with Eni gives Rosneft more opportunities to use advanced foreign technology.

In his opinion, the weak dynamics of Rosneft’s stock quotations do not reflect the prospects of its capitalization.

The Fedynsky block in the Barents Sea includes nine deposits with recoverable hydrocarbon reserves of 18.7 billion barrels of oil equivalent and the Central Barents block comprises three deposits with hydrocarbon reserves of 7 billion barrels of oil equivalent, according to briefing documents prepared for the signing ceremony.

The West Chernomorsky (Val Shatskogo) block includes six fields with recoverable reserves of about 10 billion barrels of oil equivalent.


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