Statoil and Rosneft have signed the shareholders and operating agreement for a joint venture (JV) to assess the feasibility of commercial production from the Domanik shale formation, Statoil said in a news release.

The document was signed by Rosneft president Igor Sechin and Statoil CEO Helge Lund.

The companies will set up a JV company to run a three-year pilot program and assess the potential for commercial production. The JV will be established with equity interests of 51% for Rosneft and 49% for Statoil, the release said. Both companies will contribute with technology and professionals into the JV.

In accordance with the agreement, Statoil will provide carry-based funding to perform the pilot survey program in 12 license blocks. The pilot program will include data acquisition, and the drilling and hydraulic fracturing of pilot wells.

Upon completion of the pilot program, Rosneft and Statoil will jointly select license blocks in the Samara region for commercial development.