Herbert Smith has advised Italian energy company Eni on its agreement with Russian state oil company Rosneft to finance oil and gas exploration at three offshore fields. The landmark deal was signed on 16th July at a meeting between Russian Prime Minister Dmitry Medvedev and his Italian counterpart Mario Monti.
Under the deal Eni will fully finance up to US$2 billion of exploration costs in the Barents Sea and Black Sea, with any excess costs being split between Rosneft and Eni in accordance with their stakes in the joint venture. Eni’s exploration loans will be returned from project cash flows if production is launched at any of the blocks.
Herbert Smith also advised Eni when its joint venture agreements with Rosneft relating to the project were signed in June 2012. The combined recoverable resources at the blocks is estimated at 36 billion barrels, equivalent to about 14 months of total global oil consumption. The overall project cost is expected to exceed $100 billion.
Linklaters advised Rosneft.
Danila Logofet comments:
“The Barents Sea is a major new oil and gas province and we are delighted to have advised Eni on this landmark and strategically important deal.”
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