Rosneft and the Korea National Oil Corporation (KNOC) concluded an Interim Finance Agreement (IFA) on February 22, 2005 in Moscow, envisaging KNOC’s participation in the Western Kamchatka Shelf project. Rosneft holds the exploration license for this area.

In September 2004, during the visit of Korean Republic President No Mu Hen to Russia, Rosneft and KNOC signed a Memorandum of Understanding envisaging the parties’ intention to jointly develop the Western Kamchatka area of the Sea of Okhotsk Shelf. According to the document, the parties are to cooperate by establishing joint enterprises. Pursuant to the agreement, the Korean side conducted special technical research on the licensed area.

The parties evaluate highly the partnership between the two national oil companies and, according to the interim financial agreement, decided to conduct seismic research during 2005 in the license area, which totals 60,000 square km., as well as to drill three exploration wells by 2008. They also agreed to establish a joint company by the end of this year.

According to the Korean representatives, there are two reasons for KNOC to place special emphasis on its participation in the Western Kamchatka Shelf development. The first is that the area is geographically close to the Korean peninsula, the second is its huge industrial potential.

Rosneft and KNOC believe that the Russian Kamchatka shelf hydrocarbon reserves development will contribute significantly to the stabilization of oil supplies to the Asian Pacific Region markets and provide a stable energy balance in the region.