Rosneft and ExxonMobil enter strategic partnership for development of Arctic and Black Sea resources, expand technology sharing and implement joint international projects; $3.2B exploration program planned
30 August 2011
|
|
| The East-Prinovozemelsky blocks on the Russian Arctic shelf have estimated resources of 35.8 billion barrels of oil and 10.3 tcm of gas, according to Rosneft. Inset at upper right shows location of blocks relative to larger Arctic. Click to enlarge. |
Rosneft and ExxonMobil have executed a Strategic Cooperation Agreement under which the companies plan to undertake joint exploration and development of hydrocarbon resources in Russia, the United States and other countries throughout the world, and commence technology and expertise sharing activities. The deal comes several months after a similar one proposed between Rosneft and BP collapsed.
The agreement, signed by Rosneft President Eduard Khudainatov and ExxonMobil Development Company President Neil Duffin in the presence of Russian Prime Minister Vladimir Putin, includes approximately US$3.2 billion to be spent funding exploration of East Prinovozemelsky Blocks 1, 2 and 3 in the Kara Sea and the Tuapse License Block in the Black Sea, which are among the most promising and least explored offshore areas globally, with high potential for liquids and gas, the companies said.
| Rosneft and BP |
|---|
| In January, Rosneft and BP signed agreements to establish a joint venture to explore and develop the East-Prinovozemelsky 1-2-3 blocks on the Russian Arctic shelf, exchange 9.5% of Rosneft shares for a 5% stake in BP, and form a global strategic alliance between the companies. |
| That deal collapsed earlier in the summer. |
The East Prinovozemelsky (EPNZ) License Blocks have a total area of 126,000 square kilometers (30 million acres) in water depths ranging between 50 and 150 meters (165 feet and 500 feet). The East-Prinovozemelsky field is located on the continental shelf of Russia in the South Kara Sea between the Yamal Peninsula and Novaya Zemlya island.
Earlier this year, Rosneft said that the EPNZ blocks have estimated resources of 35.8 billion barrels of oil and 10.3 tcm of gas.
Tuapse Block in the Black Sea has the total area of 11,200 square kilometers (2.8 million acres) and water depths ranging from 1,000 to 2,000 meters (3,300 feet and 6,500 feet). Tuapse has estimated recoverable oil resources of 8.2 billion barrels.
Rosneft equity interest in both joint ventures will be 66.7%, while ExxonMobil will hold 33.3%.
The companies say they will use global best practices to develop state-of-the-art safety and environmental protection systems in these projects.
The agreement also provides Rosneft with an opportunity to gain equity interest in a number of ExxonMobil’s exploration opportunities in North America, including deep-water Gulf of Mexico and tight oil fields in Texas (USA), as well as additional opportunities in other countries. The companies have also agreed to conduct a joint study of developing tight oil resources in Western Siberia.
The companies will create an Arctic Research and Design Center for Offshore Developments in St. Petersburg, which will be staffed by Rosneft and ExxonMobil employees. The center will use proprietary ExxonMobil and Rosneft technology and will develop new technology to support the joint Arctic projects, including drilling, production and ice-class drilling platforms, as well as other Rosneft projects.
We have a clear vision for Rosneft’s strategic direction—building world-class expertise in offshore business and enhancing oil recovery. The partnership between Rosneft with its unique resource base, and the largest and one of the most highly capitalized companies in the world reflects our commitment to increasing capitalization of our business through application of best-in-class technology, innovative approach to business management, and enhancement of our staff potential. This venture comes as a result of many years of cooperation with ExxonMobil and brings Rosneft into large scale world-class projects, turning the company into a global energy leader.
—Rosneft president Eduard Khudainatov
Today’s agreement with Rosneft builds on our 15-year successful relationship in the Sakhalin-1 project. Our technology, innovation and project execution capabilities will complement Rosneft’s strengths and experience, especially in the area of understanding the future of Russian shelf development.
—ExxonMobil Development Company President Neil Duffin
The agreement provides for constructive dialogue with the Russian Federation government concerning creation of a fiscal regime based on global best practices. Additionally Rosneft and ExxonMobil will implement a program of staff exchanges of technical and management employees which will help strengthen the relationships between the companies and provide valuable career development opportunities for personnel of both companies.
Where are all the Russian environmentalists? Where are the riots? They wanted to some NG drilling in France and the anti-fracking rioters were out in force. In addition to the Arab oil teet, we are going to be latched onto a Russian oil teet soon - with the multi-national corporations laughing all the way to the bank....all of this while we handcuff & strangle domestic energy production in America. Makes me sick.
Posted by: ejj | 30 August 2011 at 03:36 PM
So the 35.8 in the North is in-situ whilst the 8.2 in the Black Sea is recoverable, which gives what - six months World supply?
Posted by: macroshaft | 31 August 2011 at 03:53 AM
yes ejj...20,000,000 barrels a day will make many more very sick. Too bad that the price of oil is not up to $200+/barrel already. It could make many people think twice before buying large 15 mpg gas guzzlers. Canada, Norway, Russia, Mexico, Veneuzela, Brazil, Irak, Iran, and all other oil producers could reduce their output by 50% and still make more $$$ for twice as long.
Not too many countries can grow enough biomass to produce most of the liquid fuel they already consume.
Posted by: HarveyD | 31 August 2011 at 11:38 AM