GE, Russia's Rosneft to Explore Major Oil & Gas Opportunities

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--General Electric (NYSE:GE) (Fairfield, Connecticut) and Russia's oil and gas major OJSC Rosneft (MCX:ROSN--ME) (Moscow) signed a strategic agreement to establish a joint venture that will develop local expertise and technology solutions for the expanding oil and gas sector in Russia. GE plans to invest $1 billion in Russia through 2020. Major synergies are expected to strengthen the manufacturing and commercial capabilities of the two companies.

The joint-venture agreement is developed from a 2012 memorandum of understanding (MoU) that covers four main business activities: monetizing gas (that is, turning natural gas into commercial products), including small-scale LNG; compressed natural gas (CNG) and gas-to-liquids; refined gas and petrochemicals; and developing offshore and subsea technologies, including Arctic activities and production enhancement, including the use of artificial lift technologies.

Under the agreement, the companies will establish a research and development (R&D) program, as well as an application engineering and training center, in Russia.

GE signed a separate contract to supply two 77-megawatt, 6F-3 series gas turbines that will supply secure power for Rosneft's largest oil production project, which is located in Siberia. The two gas turbines will be manufactured at a Russian Gas Turbines facility operated by another joint venture between GE, Inter RAO UES group (MCX:IRAO.ME) (Moscow) and Russian Technologies Corporation (Moscow).

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