Rosneft, Exxon Mobil Detail Arctic Deal

April 16, 2012
Russian oil giant to gain stakes in North American projects as part of the deal.

Russia's oil giant Rosneft on Monday detailed a strategic alliance with Exxon Mobil Corp. (IW 500/1) including agreements on offshore exploration and Rosneft's participation in North American projects.

The state-owned Rosneft and Exxon Mobil last August penned a landmark partnership agreement to invest $3.2 billion on offshore exploration in the Black Sea and Kara Sea.

The companies on Monday signed agreements to create joint ventures that will manage the offshore exploration programs, Rosneft said in a statement.

"Today Rosneft and Exxon Mobil enter offshore projects of unprecedented scale in the Russian Arctic and Black Sea regions, which are home to the world's largest hydrocarbon resources base," said Rosneft President Eduard Khudainatov, who signed the agreements with Exxon Mobil's Rex Tillerson.

Rosneft subsidiaries will also gain 30% stakes in Exxon Mobil's projects in West Texas, the U.S. Gulf of Mexico and Canada, the statement said without disclosing financial details.

Neftegaz Holding America Limited will acquire 30% of Exxon Mobil's share in the La Escalera Ranch project of the Delaware Basin in West Texas, and 30% in 20 drilling blocks in the Gulf of Mexico.

Another subsidiary, RN Cardium Oil Inc., acquired 30% of ExxonMobil's stake in the Harmattan acreage in the Cardium formation in Alberta, Canada, which "may become a source for the development of technologies for unconventional reservoirs in Russia," the statement said.

"(Work on these agreements) is for years ahead," Prime Minister Vladimir Putin told Rex Tillerson while overseeing the signing in his Moscow region residence. "I wish you luck."

The partnership with Exxon Mobil last year followed Rosneft's failure to strike a similar deal with BP plc (IW 1000/3) in its search for a global partner that would share expertise and technology to explore its vast Arctic reserves.

The agreement with BP fell through after the British company's Russian partners claimed it violated their own shareholder pact.

Exxon Mobil became Russia's new partner several months later, pledging to invest $2.2 billion into the joint Arctic shelf project and be the first to tap into reserves that some scientists estimate at 100 billion tons of oil.

Exploration activity already began in the Black Sea's Tuapse Trough, where Exxon Mobil is to invest $1 billion. Drilling of the first exploration well is planned for 2014-2015, Rosneft said.

Copyright Agence France-Presse, 2012

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