BP to revive Arctic exploration plans with Rosneft

British energy giant, BP is in the process of reviving plans for Arctic oil exploration with Russian company, Rosneft, after completing the $27-billion (£17.8 billion) sale of its stake in TNK-BP to the Russian state-controlled giant.

BP also confirmed it would return $8 billion of the $12.5 billion cash proceeds to shareholders via a share buy-back after it previously said the pay-out would be at least $4 billion.

The company, which now holds a 19.75-per cent stake in Rosneft, become the largest shareholder after the Kremlin paved the way for collaboration on projects.

At a joint press conference at BP's London headquarters last night, Rosneft president Igor Sechin said, ''We are going to work, definitely, offshore with BP together.'' This is said to refer to the Arctic, where the majority of Rosneft's offshore licences lay.

Sechin said, ''We have 41 licences for offshore production. The potential of this work is so enormous that we would welcome BP at one of our larger projects that we are undertaking. We are carrying out work together with BP in choosing the projects... We know the preferences that BP have and in the near future we will find the zone offshore and agree the terms of joint work there.''

Meanwhile, Rosneft is seeking Asian partners to jointly develop the country's Arctic Shelf. In a parallel development, the company said it was eager to enlist foreign support in its ongoing battle with Gazprom for the liberalisation of Russian liquefied natural gas exports.

Sechin last month toured South Korea, China and Japan and met local political figures and the management of leading national corporations.

However, the only document signing happened in China where Rosneft signed a memorandum with China Petroleum & Chemical Corporation (SINOPEC) on a substantial increase of Russian oil supplies to that country.

Russian deputy prime minister Arkady Dvorkovich later discussed the memorandum in greater detail at a meeting of the Russian-Chinese intergovernmental commission on energy cooperation.

According to Dvorkovich's spokesperson, Rosneft could boost its current crude-oil supply to China by up to 9 million tones.

Dvorkovich also implied that China might grant Rosneft a loan for the implementation of the new agreement. The company had earlier dismissed a Reuters report that said Beijing could lend the company $30 billion in exchange for doubling the existing crude-oil supplies.

Russia's current supplies to China stand at 15 million tons of crude oil per year, along the East Siberia-Pacific Ocean (ESPO) pipeline, whose throughput capacity would doubled in the future.

Also Rosneft could implement an exchange deal which would see it supply 7 million tons of crude oil a year to Kazakhstan's Pavlodar refinery; against Kazakhstan's KazMunaiGaz state company dispatching the same volume of crude oil to China via the Atasu-Alashankou pipeline section.