Energy giant British Petroleum (BP) and state-run Russian oil firm Rosneft have signed a deal allowing BP to explore huge oil and gas deposits in Russia's Arctic shelf.

Heads of BP and Rosneft, Bob Dudley and Eduard Khudainatov, inked the $7.8 billion agreement on Friday in London.
BP will swap 5 percent of its stocks with about 9.5 percent of Rosneft's shares, according to the deal.
The agreement is BP's first deal since the Deepwater Horizon oil spill in the United States last April. The environmental disaster has cost BP billions of dollars in liability.
""Following completion of this agreement, Rosneft will hold five percent of BP's ordinary voting shares (worth approximately $7.8 billion) in exchange for approximately 9.5 percent of Rosneft's shares,"" said a joint statement issues by the two firms.
Khudainatov says the two oil companies will explore oil and gas in a 125,000 square-kilometer area of the South Kara Sea, which has reserves of five billion tons of oil and 3,000 billion cubic meters of gas.
Dudley, who described the deal as ""historic,"" said it would ""create value, deliver growth, and meet the world's demand for energy.”
""This unique agreement underlines our long-term, strategic and deepening links with the world's largest hydrocarbon-producing nation,"" he added.
In a meeting with a BP management team on Friday, Russian Prime Minister Vladimir Putin vowed to create ""the most favorable tax and administrative environment"" for the deal.
(SOURCE: Presstv)
CAPTION: Oil giant BP Chief Executive Bob Dudley (L) and Russian firm Rosneft'ss President Eduard Khudainatov