To Tap Arctic Oil, Russia Partners With Exxon Mobil
Fri, 05/25/2012 - 03:31 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
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.
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.”
President of Russian energy company Rosneft, Igor Sechin, said he was eager to unlock the shale oil potential in the Samara region of western Russia. With forecasts warning the U.S. shale phenomenon won’t last, Russia could be moving its pawns into play.
Sechin met Friday with Helge Lund, chief executive officer of Norwegian energy major Statoil, to sign a joint venture agreement for the production of the Domanik shale formation in the Samara region, near Russia’s southwest border with Kazakhstan.
BAGHDAD – Since the U.S.-led invasion of 2003, Iraq has become one of the world’s top oil producers, and China is now its biggest customer.
China buys nearly half the oil that Iraq produces, nearly 1.5 million barrels a day, and is angling for a bigger share, bidding for a stake now owned by Exxon Mobil in one of Iraq’s largest oil fields.
The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it
Exxon Mobil Corp.’s plans to develop a US$14-billion underwater oil field off Newfoundland’s coast allows the world’s biggest energy company to hedge against discounted crude from Canada’s oil sands.
“The better pricing is definitely an issue,” Brian Youngberg, an analyst at Edward Jones & Co. said by phone from St. Louis on Jan. 4. “While things could change in the time it takes to finish the project, it’s a great way for Exxon to hedge their pricing.”
Russia and Exxon have reached an agreement that opens the way for oil exploration in the Russian sector of the Arctic Ocean. And it allows the Russians access to projects in other parts of the world, including the United States. David Greene talks to Julia Ioffe, of Foreign Policy magazine who's covering the story in Moscow.