The Russo-UK joint venture, TNK-BP, has signed up to a major investment in its Arctic oilfield development.
The 50% BP-owned organisation is set to spend as much as $10bn in develpment of the Yamal region oilfields as well as constructing a pipeline that will carry the crude output to the major Zapolyarnoye-Purpe pipeline, set to be completed in 2016.
The news is a boost for Russia at a time when its West Siberian resources are sgtarting to dry up. The region is estimated to contain reserves of around 5bn barrels of oil but the field itself requires development to tap the resource and then transport it.
The Zapolyarnoye-Purpe pipeline is being built by Russia's only pipeline provider, Transneft and the BP-TNK pipe will link directly to it. Although the main pipeline will flow mainly in the direction of China, it is part of a wider Transneft network that will carry the oil from its Sazun and Tagul fields both East and West as well as output from the Messoyakha oil field - a joint venture between TNK-BP and Gazprom Neft.