Russian oil company Rosneft said it was expanding its footprint in the natural gas market by acquiring a 40 percent stake in Arctic Russia B.V. from Italian energy company Enel.
"Russia remains a strategic country for us as we will continue to operate in power generation and sales," Enel Chief Executive Officer Fulvio Conti said in a statement Tuesday.
The $1.8 billion deal gives Rosneft indirect ownership of a 19.6 percent share in SeverEnergia, a joint natural gas production venture with operations in the Yamal-Nenets autonomous region of Russia. SeverEnergia owns licenses for nine fields in the region, where proven and probable reserves are estimated at 7.3 billion barrels of oil equivalent.
Rosneft said the transaction will help with its objective of producing 3.5 trillion cubic feet of natural gas per year and transform the company into the largest independent natural gas producer in Russia.
"Gas business is one of the company's strategic development priorities," Rosneft President Igor Sechin said in a statement. "Acquisition of a stake in SeverEnergia will create a multiplying effect for further growth."