BP plc. (ADR) (NYSE:BP) on Friday managed to collude in an important partnership with Norway’s Det norske oljeselskap. According to the partnership the London based integrated Oil and Gas Company will spin off some of its oil and gas assets and fuse them with the Norwegian firm to form the largest integrated oil and gas company which will be known as Aker BP.

Crude oil prices slid to their 13 year lows this year. BP in addition was also impacted by the majestic penalties that came through the Gulf of Mexico 2010 oil spill disaster. BP not only is planning to cut down costs sharply but also selling non-core assets to allow it to focus fully on its areas of expertise.

According to the terms of the new deal Det norske oljeselskap would pay $1.3 billion for Norwegian oil and gas assets. In return BP would get 30% ownership. Aker AS that holds the majority of the shares in Det norske oljeselskap will get 40% ownership while the other shareholders of Det norske oljeselskap will be entitled to the rest of the 30% ownership.

CEO of BP Bob Dudley was extremely excited over the deal. In BP’s press release, he, regarding the issue, said that “BP and Aker have matured a close collaboration through decades, and we are pleased to take advantage of the industrial expertise of both companies to create a large independent E&P company. The Norwegian Continental Shelf represents a significant opportunity going forward and we are looking forward to working together with Aker to unlock the long term value of the company through growth and efficient operations. This innovative deal demonstrates how we can adapt our business model with strong and talented partners to remain competitive and grow where we see long-term benefit for our shareholders.”

Statoil for long has been the most dominant company in Norway. However the latest deal with BP could give stiff competition to Statoil. According to the expectations of both BP and Norway’s Det norske oljeselskap, the combined entity could produce up to 250,000 barrels a day.

Øyvind Eriksen, chairing the board of directors of Det norske regarding the issue said that “Aker BP will leverage on Det norske’s efficient operations, BP’s international capabilities and Aker’s 175 years of industrial experience. Together, we are establishing a strong platform for creating value for our shareholders through our unique industrial capabilities, a world-class asset base, and financial robustness.”