Nigerian and Russian state oil companies have agreed to form a joint venture to invest in Nigeria’s oil and gas industry, reports Reuters.

Nigaz, the new company, will be a 50/50 joint venture between Russia’s Gazprom and Nigeria’s NNPC. The companies have agreed on an initial investment of at least $2.5 billion. Nigaz will develop Nigeria’s oil and gas infrastructure, building refineries, pipelines, and gas power stations throughout Nigeria.

The announcement comes as Russian President Dmitry Medvedev visits Nigeria on the second leg of his four-nation African tour.

Nigeria has the world’s seventh-largest proven oil and gas reserves, but has been unable to fully exploit them due to lack of funds and political instability.