Aug. 30 - Oil giant ExxonMobil and Russia's state-owned energy provider Rosneft announced a partnership to explore oil and gas reserves in the Russian Arctic. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL A table filled with corporate leaders and political dignitaries as ExxonMobil and Rosneft, Russia's state-owned oil company, join forces on an Arctic exploration deal. Russian Prime Minister Vladmir Putin was on hand as the two sides finalized an agreement. SOUNDBITE: RUSSIAN PRIME MINISTER VLADIMIR PUTIN (RUSSIAN WITH ENGLISH TRANSLATION) SAYING: "Today's events will be well received, no doubt, by the world market because new horizons are opening up. One of the world's leading companies, Exxon Mobil, is starting to work on Russia's strategic shelf and deepwater continental shelf." Under the deal, ExxonMobil, the world's largest publicly traded oil company, and Rosneft will invest $3.2 billion to search for oil and gas reserves in the Russian Arctic, one of the last unconquered drilling frontiers. SOUNDBITE: RUSSIAN PRIME MINISTER VLADIMIR PUTIN (RUSSIAN WITH ENGLISH TRANSLATION) SAYING: "It's hard to even pronounce such figures direct investment could amount to two-hundred, three-hundred billion and if we also consider the development in the territory, the infrastructure, the construction work needed, then the figure could go as high as five (hundred) billion (U.S. dollars)." The announcement, however, means BP is left out in the cold after its plans for a Rosneft joint venture were blocked by investors in an existing BP-Russian investment - making way for ExxonMobil - which agreed to offer Rosneft equity interest in U.S. projects. Company CEO Rex Tillerson. SOUNDBITE: REX TILLERSON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF EXXONMOBIL (ENGLISH) SAYING: "The agreement today represents a significant expansion of the Rosneft ExxonMobil joint activities both in Russia and as you noted, importantly, in international opportunities as well." Rosneft will own two-thirds, with Exxon owning one-third of the joint venture, but shouldering most of the costs. So what's at stake? Total energy resources of about 110 billion barrels in the Kara Sea and another estimated 9 billion barrels of oil in the Black Sea. Drilling is expected to begin in 2015. Conway Gittens, Reuters