As part of the deal Rosneft will take 5% of BP's shares in exchange for approximately 9.5% of Rosneft's shares. It is BP's first deal since the Deepwater Horizon spill last year, which cost it billions. The BP shares stake is worth just under $8bn (£5bn). Rosneft is 75% owned by the Russian government. So it will look to many as though the Russian government is taking a 5% stake in a company with strategically important oil reserves all over the world, including - of course - the US.
The firms will explore in three areas - known as EPNZ 1,2,3 - on the Russian Arctic continental shelf. The areas covers 125,000 square kilometres in an area of the South Kara Sea.BP gets access to resources, Rosneft gets access to expertise and knowledge. BP and Rosneft have agreed to set-up an Arctic technology centre in Russia which will work with Russian and international research institutes to develop technologies for the extraction of hydrocarbon resources from the Arctic shelf.