Exxon Steps in as Rosneft's Arctic Partner

ExxonMobil Corp. and Russia’s Rosneft have formed a partnership to undertake joint exploration and development of hydrocarbon resources in Russia’s Arctic region.

A signing ceremony in the Black Sea resort of Sochi was attended by Russian Prime Minister Vladimir Putin and Rex Tillerson, Exxon’s chairman and chief executive.

The companies will invest $3.2bn in funding exploration of East Prinovozemelskiy Blocks 1, 2, and 3 in the Kara Sea and the Tuapse license block in the Black Sea. Rosneft will hold an equity interest in both joint ventures of 66.7%, while ExxonMobil will hold 33.3%.

The agreement provides Rosneft with an opportunity to gain an interest in a unnamed number of ExxonMobil’s exploration opportunities in North America, including deepwater Gulf of Mexico and tight oil fields in Texas, as well as opportunities elsewhere ExxonMobil operates. The agreement also provides for technology and expertise sharing activities.

“New horizons are appearing,” said Russia’s Prime Minister Vladimir Putin at the signing ceremony. “One of the leading international companies, ExxonMobil, is beginning to work on Russia’s strategic shelf and in deep waters.”

Rex Tillerson, ExxonMobil chairman and chief executive officer, said the large-scale partnership agreement would “open new horizons for cooperation between ExxonMobil and Rosneft both in Russia and abroad.”

Tillerson said ExxonMobil had been encouraged by the Russian government’s pledge to reform oil taxation and to improve investment conditions for international and Russian oil companies.

The deal follows the collapse of an earier arrangement between Rosneft and BP, which was blocked by Russian shareholders in BP’s existing Russian joint venture, TNK-BP.