In 2013, the Rosneft Public Liability Oil Company, hereinafter referred to as Rosneft, and the corporation General Electric International, Inc., hereinafter referred to as General Electric, signed an agreement on long-term strategic cooperation. The agreement envisages the establishment of a joint venture that will implement innovative technological projects to develop and modernise the Russian oil and gas sector. The agreement will strengthen the production and commercial positions of both companies and is part of General Electric’s plans to invest $1 billion in the Russian oil and gas sector by 2020.
On 11 February 2014, Rosneft President Igor Sechin and General Electric Chief Executive Officer and President Jeffrey R. Immelt signed agreements on establishing a joint venture and its subsidiaries, specifically, applied engineering, training and research centres.
The joint venture is to be established on a parity basis. Its articles of association stipulate a mechanism for establishing the above-mentioned companies. The document comes complete with a shareholders’ agreement that will be signed after the establishment of the joint venture.
The shareholders’ agreement formalises a bilateral deal to establish long-term relations for attracting General Electric technologies in order to make Rosneft assets more cost-effective and productive, to study the possibility of joint equipment research, development, testing, assembly, sales and marketing for use by the oil and gas industry in the Russian Federation and on other territories by mutual consent.
The joint venture subsidiaries shall implement commercial projects in the following areas:
· Gas monetisation activity (including LNG, CNG and synthetic fuels);
· Oil refining projects and petrochemical production;
· Projects linked with the design and construction of marine and underwater hydrocarbon extraction and transportation facilities;
· Projects to boost oil recovery, including lifting;
· Establishment of a research centre;
· Establishment of applied engineering and training centres;
· Localisation of equipment manufacture, testing, assembly, and maintenance in the Russian Federation;
· Any other areas by mutual consent.