ExxonMobil strategic agreement puts Rosneft on global stage
For Rosneft the ExxonMobil agreement marks the final burying of the quagmire it found itself in earlier this year, when BP signed up, but found itself wrangled in litigation with its own joint venture partners in Russia.The upsides that BP clearly saw, in terms of access to Russian Arctic exploration and development remain the attractions for ExxonMobil.For Rosneft the footing on the global stage is, if anything, probably better, and doesn’t involve jockeying with local partners, real or potential, or a prime partner still mired in questions about its longer term future after the TransOcean disaster in the Gulf of Mexico, and no share swaps.The upside is in the agreement clear and unambiguous commitment to broadening its technological base, developing deepwater expertise, and access to global project particularly in North America, as the Otkritie Research team, Vadim Mitroshin, Alexander Burgansky, and Tatyana Kalachova identify.
“Effectively, the signing of this agreement means that ExxonMobil has taken over BP's position in its unsuccessful deal with Rosneft, which was announced in the middle of January 2011 and effectively blocked by AAR. However, the scope of the Rosneft-ExxonMobil partnership is seemingly much broader as it comprises an array of other joint activities not covered in Rosneft's original agreement with BP. This includes offshore exploration in the Black Sea (the Tuapse Trough), Rosneft's participation in deep-water drilling in the Gulf of Mexico, tight oil fields projects in Texas (US), as well as Exxon-led projects in other countries. The companies have also agreed to join forces for developing 'hard-to-extract' oil deposits in Western Siberia. In addition, the Rosneft-ExxonMobil deal assumes the creation of a scientific/engineering centre in St. Petersburg, which will focus on offshore exploration and technologies for the safe extraction of hydrocarbons from the Russian Arctic shelf.”
The Otkritie team say that, if anything, the ExxonMobile deal is better for Rosneft than the one proposed with BP last January.
“The fact that the Rosneft-BP situation has been resolved with the selection of such a reputable international partner as ExxonMobil is positive for Rosneft. We believe it should help Rosneft boost its international presence and improve the outlook on its future development. In our opinion, the cooperation agreement with ExxonMobil looks more attractive for Rosneft than its non-realised arctic/share swap deal with BP.”
ExxonMobil CEO Rex Tillerson outlined the strategic implications for both companies in their strategic agreement.
“This large-scale partnership represents a significant strategic step by both companies. This agreement takes our relationship to a new level and will create substantial value for both companies.The agreement will be a basis for constructive dialog with the Government of the Russian Federation on establishment of a fiscal regime for offshore operation consistent with best global practices."
Speaking with Business RT Vadim Mitroshin added that the access to technology is a very significant advantage for Rosneft, which will potentially help it to unlock reserves in the Russian Arctic.
“What the Russian government wants, first of all, and what Rosneft wants, as the key agent of the Russian government offshore, is the offshore technology.This is clearly what Russia lacks at the moment.This is clearly where other foreign companies are much more advanced.So I think when they picked BP, BP was just one of the few potential candidates, but just because BP had extensive experience working in Russia I think BP was chosen as a potential partner.As far as ExxonMobil is concerned, they have a proven track record as one of the best offshore operators worldwide.They have a presence in 130 countries, everybody is aware of their experience, and their innovative technologies that they use in the Gulf of Mexico and other parts of the world, including Canada.So I think technology was the most attractive element in this deal and ExxonMobil is clearly a company which can provide, which can bring this to the alliance with Rosneft.”