Gazprom Neft, energy giant Gazprom's oil division, will hold 51% and LUKoil 49% in the new Development of the Regions company and will run the joint venture on a parity basis. The company will develop fields in East Siberia and in the Komi Territory in northwest Russia.
The charter capital will be formed from monetary funds, although originally the two companies were expected to use their assets.
Alexander Dyukov, Gazprom Neft president, said the joint project would help expand the companies' presence and improve efficiency in developing new deposits.
"The joint venture ... is an effective instrument for cooperation between the large Russian oil companies that boast impressive production and financial potential for major projects," Vagit Alekperov, LUKoil chief, said as quoted by the joint news release.
In May, Gazprom Neft and LUKoil, Russia's largest independent crude producer, signed an agreement to set up the joint venture, which will be run by a LUKoil manager in the first stage.
Cooperation between LUKoil and Gazprom Neft is based on a strategic partnership agreement for 2005-14, which was signed in March 2005.