To enter JV for Kara Sea & Black Sea offshore Russia, right for Rosneft subsidiary Neftegaz Holding America Ltd. to acquire 30% equity in W TX La Escalera Ranch project in Delaware Basin & 30% interest in 20 blocks held in the U.S. Gulf of Mexico.
Rosneft, Moscow, (London: ROSN) and ExxonMobil Corp., Irving, Texas, (NYSE: XOM) have entered a long-term strategic cooperation agreement concerning assets in the U.S. and Russia, including Rosneft’s entry onshore the U.S.
The agreements form joint ventures to manage an exploration program in the Kara Sea and Black Sea and also the right for Rosneft subsidiary Neftegaz Holding America Ltd. to acquire a 30% equity in ExxonMobil’s share in the La Escalera Ranch project in the Delaware Basin in West Texas and also a 30% interest in 20 blocks held by ExxonMobil in the U.S. Gulf of Mexico.
In addition, Rosneft subsidiary RN Cardium Oil Inc. has acquired 30% of ExxonMobil’s stake in the Harmattan acreage in the Cardium formation of the Western Canada Basin in Alberta.
Exploration activity began in the Tuapse license Block in the Black Sea in Russia in September 2011. The seismic program is now 70% complete. Interpretation of data collected will be carried out following program completion, which is 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 programs of East Prinovozemelsky blocks later this year in anticipation of a potential exploration well in 2014.
The initial cost of preliminary exploration in the Russian offshore projects is estimated at more than US$3.2 billion.
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.
Rosneft president Eduard Khudainatov says: “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.”
ExxonMobil chief executive Rex Tillerson says, “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.”
Eduard Khudainatov and Rex Tillerson 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.