(EnergyAsia, April 18 2012, Wednesday)— Russia’s Rosneft and US major ExxonMobil have signed agreements to implement joint efforts to explore and develop oil and gas in both their countries as well as Canada.
Signed in the presence of Russian Prime Minister Vladimir Putin and Deputy Prime Minister Igor Sechin, the agreements form joint ventures to manage an exploration programme in the Kara Sea and Black Sea. They also set the terms for US$3.2 billion worth of investments to be made by the partners in Russian offshore projects.
Signed by Rosneft President Eduard Khudainatov, ExxonMobil Corp chairman and CEO Rex W. Tillerson, ExxonMobil Exploration Company President Stephen M. Greenlee, and, ExxonMobil Development Company President Neil W. Duffin, the agreements implement a long-term strategic cooperation agreement concluded last August that calls for the companies to share technology and expertise.
Neftegaz Holding America Limited, an independent indirect subsidiary of Rosneft registered in Delaware, concluded separate agreements to acquire a 30% equity in ExxonMobil’s share in the La Escalera Ranch project in the Delaware Basin in West Texas in the US.
Neftegaz Holding America Limited will also be given the right to acquire a 30% interest in 20 blocks held by ExxonMobil in the US Gulf of Mexico, one of the most oil and gas rich basins in the world. The ExxonMobil blocks are located in prospective areas of the Western part of the Gulf.
In addition, RN Cardium Oil Inc., an independent Rosneft subsidiary, acquired 30% of ExxonMobil’s stake in the Harmattan acreage in the Cardium formation of the Western Canada Basin in Canada’s Alberta province.
The Cardium formation is an active unconventional oil play in which ExxonMobil has a significant acreage position. The execution of that project may become a source for the development of technologies for unconventional reservoirs in Russia.
As part of implementation of the Strategic Cooperation Agreement, exploration activity began in the Tuapse licence block in the Black Sea in Russia in September 2011. The seismic programme is 70% complete. Interpretation of data collected will be carried out following programme completion scheduled for the second quarter of 2012. Drilling of the first exploration well is planned for 2014-2015.
In the Kara Sea, plans are under way to undertake seismic and environmental programmes of East Prinovozemelsky blocks later this year in anticipation of a potential exploration well in 2014.
Mr Khudainatov said: “Today Rosneft and ExxonMobil 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. In so doing we lay the foundation for long-term growth of the Russian oil and gas industry.
“I am certain that 15 years of Rosneft and ExxonMobil partnership, as well as the use of the latest environmentally safe technologies and unique experience will allow Rosneft to become one of the global leaders in the oil and gas industry.”
Mr Tillerson said: “These agreements are important milestones in this strategic relationship. Our focus now will move to technical planning and execution of safe and environmentally responsible exploration activities with the goal of developing significant new energy supplies to meet growing global demand.”
In a joint statement, the two CEO said said they were encouraged to proceed with these projects by the Russian government’s efforts to reform taxation of the high-potential oil industry sectors and improve investment conditions for foreign and Russian oil companies.
Rosneft and ExxonMobil have also signed an agreement to jointly develop tight oil production technologies in Western Siberia. This will enable the companies to later discuss undertaking joint projects to explore and develop prospective areas with unconventional oil potential in Russia.
A programme of technical and management staff exchanges has been agreed to by the companies and their affiliates including positions in geology, geoscience, field development, well drilling, finance, logistics, safety, health and the environment. The knowledge and experience exchange will not only strengthen relationships between the two companies and their affiliates but also provide career development opportunities.
The Arctic Research and Design Center for Offshore Developments will provide a full range of research and design services to support the development of offshore fields. The main roles of the center include supporting all stages of oil and gas field development on the Arctic shelf and helping ensure projects are environmentally safe, including through the provision of technical support in environmental monitoring.
The centre will also support offshore safety. A special Offshore Accident and Emergency Warning and Prevention Service will be created to help prevent and respond immediately to any emergencies or accidents.