The World Economic Forum in Davos was the location where ExxonMobil announced its joint venture with Rosneft to explore the Black Sea for oil. The two energy giants are combining forces to explore a deepwater trough off the coast of Krasnodar. During the exploratory stage, the two companies will split the costs 50-50, but Exxon will pay 66 percent during the development stage. The geologic formation, known as the Tuapse Trough, is estimated to hold 7.2 billion barrels of oil or its equivalent. http://www.themoscowtimes.com/business/article/exxon-rosneft-sink-1bln-in-black-sea/429894.html Exxon has committed itself to drilling two wells in the area, according to Hurriyet. ExxonMobil has been in Russia a number of years, as 30% owner of the consortium that has developed the Sakhalin-1 project.
The $1 billion deal was signed on January 27. Russian Deputy Prime Minister and Rosneft Chairman Igor Sechin remarked, "Cooperation with ExxonMobil once again underscores our commitment to the principles of transparency and vision of the Russian energy industry as a part of an integrated market place." The St. Petersburg Times reports that the consensus is that Sechin is sincere; Rosneft is looking to a global future, and to achieve that goal requires Western partners.
Rosneft has now signed deals with both BP and ExxonMobil, and Shell's CEO Peter Voser says that he is also in talks with company concerning a possible partnership. Energy analyst Matthew Hulbert writes in European Energy Review that such deals represent the start of a mergers & aquisitions frenzy in the upsteam sector in Russia and other countries, as a result of the Exxon oil spill in the Gulf. Traditionally "safe" locales such as the United States have been demonstrated to carry large, potential financial risks. This is forcing the majors to look at other locations that were previously rejected because of the political risk.
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