BP has agreed a multi-billion pound deal with Russia’s state-owned Rosneft that give’s the UK oil company favourable tax breaks when drilling in the Arctic circle.
BP and Rosneft agreed to a share swap under which they plan to jointly explore for offshore oil and gas in a deal that gives BP access to areas of the Arctic previously reserved for Russian oil companies.
BP, recovering from its Gulf of Mexico oil spill disaster, will swap 5% of its shares, valued at $7.8bn, for 9.5% of Rosneft in an agreement that immediately raised concerns about US economic security from at least two American lawmakers and criticism from environmentalists.
The deal covers huge areas of the South Kara Sea in the Arctic that BP said could contain billions of barrels of oil and gas and had been previously off limits to foreign companies.
The pact, which is expected to be completed in a few weeks, marks a turnaround in BP’s relations with Moscow.
