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State energy giants Rosneft and Eni signed off on a strategic partnership that will see the pair invest over $120bn in offshore oil and gas production in the Barents and Black Seas on April 25. The second such deal in as many weeks, Rosneft is motoring onwards with the state plan to open the Russian upstream segment up in return for expertise and technology.

"The two firms will invest $50-70bn for full development in the Barents Sea and about $50-55bn in the Black Sea," Rosneft President Eduard Khudainatov said, according to RIA Novosti, as he signed off on the deal together with Eni chairman Paolo Scaroni.

Under the agreement, Eni and Rosneft will jointly develop the Fedynsky and Central Barents blocks in the Barents Sea, and the Val Shatskogo deposit in the Black Sea. Eni will take a 33.3% share in the joint venture and finance geological prospecting to the tune of around $2bn, according to Khudainatov.

Eni already has considerable experience of working in the hostile Barents Sea in partnership with Norway's Statoil. That is key for Russia, which has seen almost all its major reserves move off shore in the last decade, but has practically zero experience in off-shore drilling, let alone in the hostile environments found off most of its coasts.

On the back of this, over the last couple of years the government has reversed the policy it followed through most of the last decade - when it effectively nationalized many licences handed out to foreign energy majors in the 1990s - to invite international companies into projects. Just last week, Rosneft officially sealed a deal with US major ExxonMobil that will see the pair launch exploration in the Arctic, as well as opening several US projects to Russian participation.

The move by Eni follows changes to Russia's tax regime for the oil and gas sectors that helps make such expensive long-term projects viable. The government introduced sweeping tax concessions of up to 15 years after the start of production for offshore projects in April. "Nothing would have been possible if you had not taken action in relation to Russia's taxation system," Scaroni told Prime Minister Vladimir Putin, who also attended the signing.

Analysts expect further deals, including team ups between state giants Rosneft or Gazprom and independent Russian energy companies, which are barred from developing offshore assets on their own. Rosneft has started talks with Lukoil on joint development of the Arctic shelf, the two companies reported on April 26.

However, analysts worry that some aspects of the Eni deal may not be so promising. "Though we welcome another global company's interest to participate in Rosneft's shelf projects, we are particularly concerned about the potential success of exploration at Val Shatskogo," writes Alfa Bank. "It is important to remember that Chevron exited the project last year due to a lack of potential after the company conducted preliminary seismic analysis."