U.S. energy behemoth
) and Rosneft - Russia's biggest oil producer - have decided to
extend their joint venture (JV) agreement signed two years ago.
This deal entails the addition of 7 more licenses to develop
hydrocarbon resources on Russia's Arctic shelf and a plan to
export liquefied natural gas (LNG) from the Russian Far East.
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The latest development now involves approximately 150 million
acres covering potential exploration fields in Russia's Arctic
territory on Alaska's North Slope. The 7 new blocks are in the
Chukchi Sea (covering Severo-Vrangelevsky-1,
Severo-Vrangelevsky-2 and Yuzhno-Chukotsky blocks), Laptev Sea
(Ust' Oleneksky, Ust' Lensky and Anisinsko Novosibirsky) and Kara
Sea (Severo Karsky block). Russia's Arctic territory is
considered one of the least explored prolific offshore regions
In recent times, Italian energy major
) and Norwegian oil and gas company
) have also joined hands with Rosneft to develop Arctic fields.
Under a separate concord, state-controlled Rosneft will have the
option to acquire a 25% stake in ExxonMobil's Point Thomson
division. The U.S. energy major contends that this unit is
estimated to hold 25% of the known natural gas resources buried
under Alaska's North Slope. Point Thomson is anticipated to
restrain 8 trillion cubic feet of natural gas, about 300 million
barrels of gas condensate liquids, and traditional crude oil. Its
expansion is believed to a major development for an Alaskan
natural gas pipeline.
ExxonMobil owns 62.5% of Point Thomson. The participation in
Point Thomson is expected to enhance Rosneft's footprint to the
newest gas and condensate field development know-how used in
harsh weather conditions.
Moreover, the two companies signed a memorandum of understanding
to study the feasibility of developing LNG assets in far east
Russia. The study will also look at the possibility of
constructing an LNG facility on the island of Sakhalin, off
Russia's Pacific coast.
Recently, the Russian oil behemoth also agreed to a separate
$14.2 billion accord for its purchase of a 50% stake in TNK-BP,
from a consortium of Soviet billionaires. Last year, Rosneft
inked a deal to take over Anglo-Russian oil company TNK-BP from
its joint owners, the AAR consortium and
), for $55 billion. Upon successful completion of the deal,
Rosneft will likely turn out to be the world's largest listed oil
ExxonMobil is the world's best-run integrated oil company given
its track record of superior return on capital employed. This
deal could unlock about 36 billion barrels of oil reserves in the
unexploited Russian offshore province. Such development will
boost its earnings in the near future.
ExxonMobil has a Zacks Rank #3, which translates into a Hold
rating for a period of one to three months.