With the deal, announced on Tuesday this week, ExxonMobil replaces BP as Rosneft’s strategic partner in the Arctic. According to the deal, the two companies will jointly map and develop the three East Prinovozemelsky License Blocks in the Kara Sea, an area covering 126,000 square kilometers. The blocks are identical to the areas included in the deal between Rosneft and BP from January this year, an agreement which collapsed following protests from TNK-BP.
ExxonMobil, the world’s largest public company in market capitalization, snapped the deal ahead of several contenders, among which was Norwegian oil major Statoil. Also Total and Chevron wanted the lucrative areas.
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The deal also includes the exploration of the promising Tuapse Block in the Black Sea as well as Rosneft’s access to fields in North America and the Gulf of Mexico. Part of the agreement is also the establishment of an Arctic Research and Design Center for Offshore Development in St. Petersburg, to be manned by representatives of both companies.
The three East Prinovozemelsky blocks are located to the east of the Novaya Zemlya archipelago. Water depths in the area range between 40-350 meters and there icy period covers between 270-300 days of the year. There is a high level of environmental vulnerability in the area, the press release from Rosneft confirms.
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The signing ceremony, which took place in Sochi on the Black Sea coast, was attended also by Russian Prime Minister Vladimir Putin, who underlined that the deal opens “new horizons”. According to Putin, the direct investments included in the deal amount to between 200-300 billion USD. In addition comes the development of territories, infrastructure and construction, which could bring the total numbers to 500 billion, Putin said, a transcript published on the Russian government website reads.
Rosneft and ExxonMobil have fifteen years of cooperation in the Sakhalin-1 project as a starting point for relations. The U.S. company also has extensive offshore experiences from the North American part of the Arctic.
“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 says in the press release.