ExxonMobil and the Russian oil and gas company Rosneft are looking at the possibility of working together on projects in North America, but “definitely not Hibernia,” an ExxonMobil representative has told The Telegram.
The consideration of joint projects for the two companies is part of a multibillion-dollar strategic co-operation agreement signed by ExxonMobil and Rosneft Aug. 30.
The Russian Federation holds a 75 per cent stake in Rosneft. With the signing of the agreement with ExxonMobil, the Russian daily newspaper the Kommersant reported there was a possibility Rosneft would become involved in the Hibernia project, off Newfoundland and Labrador.
The paper credited a source close to negotiations, stating “Rosneft may join Canada’s Hibernia project, where ExxonMobil has 33.1 per cent (stake).”
That statement also ran, verbatim, in a press release posted online by the Russian embassy in Canada, dated Sept. 5. That release did not credit the Kommersant.
The Telegram contacted ExxonMobil this week to ask whether or not there had been any move to involve Rosneft in Hibernia.
“There’s no truth to that report,” Alan Jeffers of ExxonMobil said.
He said there have been discussions with Rosneft looking at various potential projects, including Gulf of Mexico exploration and “tight oil” projects in the United States, but a producing asset like Hibernia has not been part of those discussions.
As for the Russian news report, Jeffers said he had seen it. “I think there was some confusion on their part,” he said.
Meanwhile, the ExxonMobil-Rosneft agreement points to a future for oil exploration in the Russian North. The deal includes a firm commitment of US$3.2 billion for offshore exploration in the Black Sea and in the Kara Sea, the latter reaching into the Arctic.
The ExxonMobil share in the joint ventures will be 33.3 per cent, according to a Rosneft release, while the Rosneft share will be 66.7 per cent.
The formal agreement between Rosneft and ExxonMobil, focused on “building offshore and tight oil expertise,” was signed by Rosneft president Eduard Khudainatov and ExxonMobil development president Neil Duffin. Russian president Vladmir Putin attended the signing, as did chairman and CEO of ExxonMobil Corp., Rex Tillerson.
“This large-scale partnership represents a significant strategic step by both companies,” Tillerson said at the time.
The deal includes a commitment to the establishment of a joint Arctic Research and Design Centre (ARC) for offshore development in St. Petersburg, Russia. Unlike the Centre for Arctic Resource Development, being established in St. John’s, work at the ARC will only be open to employees of the two investors, according to the Rosneft release. It will use proprietary ExxonMobil and Rosneft technology in its work to develop new technology and methodology for oil and gas projects in the Arctic.
afitzpatrick@thetelegram.com
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