To Tap Arctic Oil, Russia Partners With Exxon Mobil
Fri, 05/25/2012 - 02:31 EDT - NPR - National Public Radio (Business News)
Moscow's recent deals with foreign oil companies are designed to maintain Russia as the world's No. 1 oil producer. The biggest deal, with Exxon Mobil, would put billions of dollars toward exploiting vast oil and gas reserves in Russia's Arctic waters.» E-Mail This» Add to Del.icio.us
As the Russian standoff on Ukraine continues, the EU and the US are ready to slap another round of sanctions on Russia. The new sanctions would restrict drillers from pursuing future exploratory activities in the Arctic as well as deepwater and shale rock formations with Russian partners.
Exxon Mobil Corp.’s dream of drilling in the Russian Arctic may risk running aground on the politics of Ukraine.
The company plans to start drilling in August in the Arctic’s remote Kara Sea — the centerpiece of Exxon’s global alliance with Russian state-controlled OAO Rosneft. The partnership, which includes shale exploration in Siberia and joint venture fields in Texas, will come under greater scrutiny after the U.S. placed sanctions on Rosneft’s Chief Executive Officer Igor Sechin.
Submitted by Nick Cunningham via OilPrice.com, The next several months may be pivotal for the future of oil development in the Arctic. While Russia has proceeded with oil drilling in its Arctic territory, the U.S. has been much slower to do so. The push in the U.S. Arctic has been led by Royal Dutch Shell, a campaign that has been riddled with mistakes, mishaps, and wasted money.
Russia’s state-run oil company said a well drilled in the Arctic Ocean with Exxon Mobil Corp. struck oil, showing the region has the potential to become one of the world’s most important crude-producing areas.
OAO Rosneft Chief Executive Officer Igor Sechin said the exploration well had found about 1 billion barrels. The number of similar geological structures nearby means the immediate area probably contains more than the U.S. part of the Gulf of Mexico, he said at the rig that drilled the well.
“It exceeded our expectations,” Sechin said.
WASHINGTON – The United States and Europe kicked off a joint effort on Tuesday intended to curb Russia’s long-term ability to develop new oil resources, taking aim at the Kremlin’s premier source of wealth and power in retaliation for its intervention in Ukraine.
Lundin Petroleum AB, the Swedish explorer focused on Norway, said there won’t be any new oil output in the ice-filled waters of the Arctic for at least 15 years because of technical and logistical challenges.
“I don’t think we’ll see any oil production in the Arctic any time soon — probably not this decade and not the next,” Chairman Ian Lundin said in a Feb. 20 interview in Stockholm. “The commercial challenges are too big.”
As Barack Obama and Vladimir Putin argue over human rights in Russia and the fate of fugitive U.S. intelligence analyst Edward Snowden, the countries’ biggest oil companies are preparing to drill for giant oil discoveries together in the Arctic Ocean.
Russia’s decision to give China a share of prized Arctic exploration licenses as part of a “breakthrough” deal signals how the world’s largest oil and gas producer and the biggest energy consumer are redrawing the global energy map.