British Petroleum (BP) has agreed to sell its interests in the East Siberian Kovykta gas field to Russian gas giant Gazprom, Russian news agencies reported on Friday.

TNK-BP, BP's Russian joint venture, has agreed to sell Gazprom the whole 62.89 percent stake it owns in Russia Petroleum, the company which holds the license for the Kovykta gas field, and its 50 percent interest in the East Siberian Gas Company (ESGCo), which is constructing the regional gasification project.

Gazprom will pay 600 million to 900 million U.S. dollars for TNK-BP's interests in Russia and ESGCo. The sum of the deal will be fixed at the current market rate within 90 days, Gazprom said.

Gazprom and TNK-BP also agreed on a call option for TNK-BP to buy a 25-percent-plus-one share stake in Russia Petroleum. This option could be exercised once a significant joint investment or asset swap has been agreed under the terms of Friday's memorandum of understanding.

Earlier in the day BP and TNK-BP signed a memorandum on the establishment of a strategic alliance with Gazprom in investments in joint energy projects and a swap of assets worldwide.

The companies will form a joint group for studying strategic possibilities of investments inside and outside Russia.

Gazprom and BP will set up a joint venture with equal shares with a cost of no less than 3 billion dollars, Gazprom Deputy CEO Alexander Medvedev said on Friday.

"Gazprom will own 50 percent and TNK-BP or BP, depending on what assets will be allocated -- another 50 percent," he said.

The Kovykta condensate gas field is one of the largest in Russia with its reserves estimated at 1.9 trillion cubic meters of natural gas, 2.3 billion cubic meters of helium, and 115 million tons of liquid gas condensate.

Russia Petroleum has a license for the Kovykta development. Its shareholders are TNK-BP, Interros and the Irkutsk regional administration.

Source: Xinhua