The presidents of the two countries, Vladimir Putin and Heidar Aliyev, signed an agreement to divide the Caspian seabed along a so-called median line.
"The countries will exercise their sovereign rights on developing mineral resources of the Caspian seabed within the limits of their respective sectors," the agreement said. "The countries also consider the accord as part of general agreements on the Caspian Sea."
Five countries bordering the sea, which also include Iran, Kazakhstan and Turkmenistan, have failed to find a common approach to stop disputes over the sea. That has forced BP, ExxonMobil and Royal Dutch Shell to halt or slow work on oil and gas fields in the area.
Russia, the world's second largest oil exporter, expects winter weather to reduce its fourth-quarter oil shipments to the West by less than it did in the same period last year.
Shipments will fall by 4.3% from third quarter levels, in comparison to a 7.9% decline in the fourth quarter of 2001.
Finally, a senior executive with Russia oil giant Lukoil has been kidnapped by masked gunmen while on his way to work. According to a police statement, CFO Sergei Kukura was handcuffed and his driver and bodyguard drugged while the attackers sped away in a car with blue number plates of a similar type that is usually used by police vehicles.
Mr Kukura, who has held his current post since 1996, is a top petroleum expert and had access to "confidential information, including state secrets," according to Lukoil. Russian businessmen have in the past been targeted by criminal groups, but experts say such high-profile abductions are rare.
