Gazprom buys off Siberian gas field from BP

There was some surprise in global markets at the terms of the deal, which was more favorable to BP than analysts and some company executives had predicted. There was a general fear that BP would end up getting next to nothing.

BP continues to have major oil holdings in Russia, which account for 10 per cent of its global revenue, analysts said.

As for the deal itself, BP obtained an option to purchase a 25 per cent stake in the field within 12 months, which would allow it to share in potentially vast profits.

Under the deal, TNK-BP, BP's joint venture with a group of Russian tycoons, will sell its 62.89 per cent stake in the Kovykta gas field, in the Irkutsk region of eastern Siberia, for $700 million to $900 million, according to a BP statement.

Gazprom said the price would be fixed in 90 days. BP had already invested about $500 million in the field.

BP and Gazprom also agreed to invest at least $3 billion jointly in energy projects in Russia and around the world. "This historic agreement lays the ground for powerful cooperation," said BP chief executive officer, Tony Hayward.