Russian oil major OAO Rosneft Monday said it signed an agreement with oil and natural gas giant Exxon Mobil Corp. (XOM) to jointly develop several tight oil fields in Western Siberia, which will result in ExxonMobil's entry into the Arctic Research and Design Center for Offshore Development.
Commenting on the agreement, Igor Sechin, president of Rosneft stated, "We are not only looking at new geographies for our operations but are also opening up the potential of tight oil in established oil provinces. In that respect the Yuganskneftegaz region in Western Siberia appears to be the most promising."
The companies have signed a long-term strategic cooperation agreement in August 2011 for a broad cooperation in Russia and in a number of international projects managed by ExxonMobil and as a followup signed a deal on June 15, defining the terms of entry into Arctic Research and Design Center for Offshore Development. The agreements were signed by Igor Sechin and ExxonMobil Exploration Co., President Steven Greenlee in the presence of Russian President Vladimir Putin.
ExxonMobil has technology leadership in tight oil and unconventional reserves development. Rosneft has direct knowledge and experience of Western Siberia's geology and conventional production.
The companies will use the advanced technologies that ExxonMobil has successfully used at some of its own fields. The drilling is scheduled to start in 2013.
If the programme yields encouraging results, the parties will set up an operator company with Rosneft holding a 66.67 percent interest and ExxonMobil holding 33.33 percent during the exploration stage, Rosneft added.
The strategic cooperation agreement of 2011 was for joint development of Russia's offshore Arctic and Black Sea resources. The agreement included a $3.2 billion exploration program in the Kara and Black Seas. Under the agreement, Rosneft had agreed to participate in ExxonMobil projects in the U.S. and other countries, including deep-water Gulf of Mexico and tight oil fields in Texas, with a focus on building offshore and tight oil expertise.
Rosneft had earlier struck a deal with British oil giant BP plc (BP, BP_UN.TO, BP.L) in January 2011 to jointly develop Russia's Arctic, but the deal collapsed in May following a legal challenge from the co-owners of BP's Russian venture, TNK-BP Ltd.
XOM closed Friday's regular trading at $83.22 on the NYSE.
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