BP frozen out of Arctic as Rosneft turns to Exxon
BP was left out in the cold yesterday after its US rival ExxonMobil struck an agreement to explore Russia's oil-rich Arctic continental shelf with Rosneft, moving in just months after the collapse of a similar pact between the state energy giant and the UK group.
Exxon's agreement – billed somewhat more modestly as a "strategic co-operation agreement" in contrast to BP's failed "strategic global alliance" – will see it jointly explore the same Arctic blocks that the UK group had planned to exploit as part of its deal earlier his year.
Part of the $3.2bn (£2bn) earmarked for exploration – much of which will come from Exxon – under the new deal, will also go towards activities in the Black Sea, Exxon and Rosneft said. The Arctic licences alone cover around 126,000 square meters, an area roughly the size of the UK North Sea.
The agreement was signed by Rosneft president Eduard Khudainatov and ExxonMobil Development Company president Neil Duffin in the presence of the Russian Prime Minister Vladimir Putin.
ExxonMobil's chief executive, Rex Tillerson, who was also present at the signing in Sochi on the Black Sea coast, said the pact built on the US group's longstanding engagement with Rosneft over the country's Sakhalin-1 project. "This agreement takes our relationship to a new level and will create substantial value for both companies," Mr Tillerson added.
In another echo of the BP deal that had included plans for an Arctic technology centre, Exxon and Rosneft will build an Arctic research and design centre for offshore developments in St Petersburg.
But instead of the $7.8bn share swap featured in the BP-Rosneft pact, the new deal will give the Russian group the chance to gain stakes in a number of Exxon's exploration projects in North America and elsewhere, including opportunities in the Gulf of Mexico and in some of the company's oil assets in Texas. Exxon and Rosneft will also conduct a study aimed at developing unconventional oil resources in Western Siberia.
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