The company, in conjunction with Statoil, the Norwegian state oil company, has been awarded the exclusive right to carry out a feasibility study into Dostlug and Shak Deniz, two fields in the Caspian Sea.
Dostlug contains at least one billion barrels of recoverable oil; the other has yet to be evaluated.
In addition to the right to assess the fields' potential, the deal enables the partners to negotiate production-sharing arrangements.
BP's exploration arm will lead the evaluation work and own about one-third of the venture. The Azeri government will own half and Statoil the balance.
The companies already have a 19 per cent interest in the Azeri field, where Amoco, the US company, is leading a study.
BP is selling a Croydon-based foams business to its management for pounds 20m. The buyout is backed by 3i and Prudential Ventures.