ExxonMobil begins probing Arctic with Rosneft
Both oil companies hope that being first in the frozen territory will make them long-term global energy leaders.
Thu, Aug 16, 2012 at 09:20 AM
Photo: Dmitry Kostyukov/AFP
MOSCOW — Russia's main oil producer Rosneft said on Aug. 16 it had joined forces with ExxonMobil and begun exploring the Arctic for the vast energy resources believed to be hidden under its forbidding seas.
The landmark announcement comes one year ahead of schedule and almost exactly 12 months after the U.S. super-major squeezed out the British energy group BP to claim a coveted spot as Rosneft's Arctic oil development partner.
A Rosneft official said an ExxonMobil seismic survey vessel called the Western Trident and two of the state firm's Russian ships had anchored in the Kara Sea off Siberia to begin probing its deep sands.
"The work program has been developed jointly with ExxonMobil," the Russian firm added in a statement.
Rosneft said the exploration covers thousands of square kilometers (miles) in the first two of the three Arctic blocks included in a $3.2 billion deal that also covers parts of the Black Sea.
Neither company expects to begin producing commercial-grade oil in the region until early next decade.
But both hope that being the first through the door to the frozen territory will allow them to become long-term global leaders by managing to secure vast future sources of explorable energy ahead of their rivals.
Rosneft has since also arranged similar tie-ups with Italy's ENI and Norway's Statoil — deals marking Russia's first concerted attempt to drill seemingly-inaccessible fields for which it previously lacked the technology.
All three strategic partnerships see Western majors share their know-how and fund most of the initial project work on sectors owned by Rosneft under license from the Russian state.
Russia's oil production rates are in fact slowly declining because of the gradual depletion of easier-to-access fields that were first discovered by the Soviets nearly half a century ago.
Yet Middle East turmoil has long made Russia into a tempting target for world majors with experience in digging for oil in politically challenging environments.
ExxonMobil was one of the first Western majors to break into the post-Soviet energy market and is currently also developing oil and gas off Sakhalin Island in the Pacific.
Rosneft's current chief executive Igor Sechin said on a swing through New York in April that he viewed the ExxonMobil agreement was "a long-term collaboration that would be extended for decades — 30, 40 or 50 years."
The mutual benefits of joint exploration have escaped Russia for much of the past two decades as the Kremlin continued to closely guard access to its natural resources.
But President Vladimir Putin — his first two Kremlin terms punctuated by a strong state ownership campaign — has vowed to open up the Arctic to private players under tight rules that still would only give them minority stakes.
The decision also allows Rosneft to finally expand its production base outside Russia and gain access to projects such as the deep-water one ExxonMobil is operating in the Gulf of Mexico.
The ExxonMobil agreement also allows Rosneft to try and develop light crude from the so-called "tight oil" fields it owns but had lacked the expertise to profit from in West Siberia.
The first drilling for geological studies in that region is scheduled to begin next year.
Copyright 2012 AFP Global Edition