By Saabira Chaudhuri
General Electric Co. (GE) and Rosneft reached a preliminary agreement to jointly evaluate and develop commercial oil and gas exploration and production opportunities in the Russian Federation.
GE's oil and gas division and the Russian oil and gas company signed a memorandum of understanding under which GE would help Rosneft improve efficiency and yields in its exploration and recovery operations, and the pair would explore opportunities to jointly develop, manufacture and sell equipment for use in Russia's oil and gas industry.
"The MOU underscores GE's interest in discussing, jointly with the Russian government and Russian oil and gas companies, the technology needs of the Russian oil and gas industry today and in the future, identifying key areas of cooperation to create value for the Russian Federation and GE," GE Energy Chief Executive John Krenicki said.
Under the terms of the agreement, GE and Rosneft will form a joint working group to identify potential opportunities, including equipment for Arctic offshore field development, gas monetization technologies and enhanced oil recovery and difficult reserve development.
GE has a history of partnering with Russia. In September, the conglomerate revealed that it had set up two new joint ventures in Russia to expand its presence in the country's health-care and energy markets. Last month the company issued a statement saying it supports the introduction of legislation that would establish permanent normal trade relations with Russia, which is slated to join the World Trade Organization later this summer.
In April, GE reported that its first-quarter earnings declined 12% as the conglomerate's revenue slumped in the absence of a contribution from media company NBC Universal. Still, the quarter showed some progress in GE's industrial businesses, which had in recent quarters struggled to translate higher revenue into bigger profits as prices remained under pressure from competition and weak demand.
GE's stock was down eight cents to $20.76 in recent trading. Shares are up 16% year-to-date.
Write to Saabira Chaudhuri at firstname.lastname@example.org
(END) Dow Jones Newswires
July 02, 2012 10:22 ET (14:22 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.