BP confirms joint venture with Rosneft

MOSCOW, Nov. 1 (UPI) -- British energy company BP said Tuesday it confirmed a pledge to invest as much as $300 million in developing reserves in Russia alongside oil company Rosneft.

BP issued a statement confirming a joint venture with Rosneft to carry out exploration work in two inland basins in Russia. Starting in late 2016, both sides working through the Yermak Neftegaz joint venture will carry out preliminary seismic surveys to get a better understanding of the resource potential there.

"BP has committed to provide up to $300 million in two phases as its contribution to the cost of the joint venture's activities at the exploration stage," the British company said in a statement.

Both companies have a turbulent past. BP CEO Bob Dudley served formerly as a top official at Russian joint venture TNK-BP before moving to the British major.

Dudley stepped down from his position at TNK-BP in 2008 following a divisive row with Russian shareholders in the venture represented by the Alfa, Access/Renova group. He fled Russia six months before that in order to carry out his responsibilities in a secret European location, citing harassment and disputes stemming from alleged violations of Russian labor laws.

AAR said Dudley was managing the firm as a division of BP, while BP officials worried about the growing influence of Russia in the merger.

BP at one point was considering shares in Rosneft in exchange for holdings in TNK-BP. A Russian court had already ordered the British company to pay out more than $3 billion for a failed 2011 proposal with Rosneft for work in the Arctic.

BP reported third quarter profits were down nearly 50 percent from last year as lower crude oil prices continue to put pressure on revenue streams. Those low oil prices are in part a response to a market that's oversupplied and, based on September figures, Russian oil production is at around 11.1 million barrels per day, a new post-Soviet record-high.