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MOSCOW. April 25 (Interfax) - Only last week Rosneft (RTS: ROSN) signed agreements with ExxonMobil that grant is access to its partner's fields abroad in return for a role in some of its own projects on the Russian shelf. The state-owned Russian oil company signed similar deals with Italy's Eni on April 25 and it doesn't look like limiting itself to two strategic partners.

file photoEni instead of Chevron

The president of Rosneft, Eduard Khudainatov, and the head Eni, Paolo Scaroni, signed an agreement on strategic partnership and an agreement on the creation of a joint venture for the development of the Fedynsky and Central-Barents sections in the Barents Sea and the Western Chernomorsky (Shatsky Ridge) section in the Black Sea. Eni's stake in this JV will be 33.33%. Rosneft and Eni could invest $100 billion-$200 billion in the Russian shelf, just less than is planned in partnership with Exxon.

Eni will provide financing for the geological exploratory work necessary for determining the sections' commercial prospects.

The agreement also calls for exchanging technology and personnel, and Rosneft's involvement in Eni's international projects.

The sections for joint development in Russia hold an estimated 36 billion barrels oil equivalent.

Shatsky Ridge has been offered to foreign companies before. Rosneft and Chevron reached an agreement on the joint development of Shatsky in June 2010, but in March 2011 there were reports that the U.S. company might pull out of the project over differences concerning the geology of the field and assessment of reserves.

Chevron, as it exited the Shatsky project, was unable to reach agreement with Rosneft on the joint development of other offshore projects in Russia, although it very much expected to.

Later, Rosneft said that two companies were contesting for the section. Khudainatov said it would be logical for ExxonMobil to develop it, as the U.S. company is a Rosneft partner at a neighboring section in Tuapse Bay. France's Total might also be a Shatsky Ridge development partner, as that company vied for inclusion in the project several years ago.

The choice was ultimately made in favor of Eni. Khudainatov is confident a discovery will be made in the course of this partnership. "Seismic data and the recent discovery of hydrocarbons in the Romanian section of the Black Sea mean it is highly likely that oil and gas will be found at the Western Chernomorsky field," Rosneft said in a statement.

"I am confident that these projects on the shelf will be successful, and I want to assure you that the Russian government will do everything to support projects of this kind," Russian Prime Minister Vladimir Putin said at a meeting with Eni's Scaroni.

Good at home, but better in America

Rosneft will be able to participate in Eni's international projects under the deal signed on April 25. "Now we are developing cooperation with Rosneft with regards to third countries. There is talk of cooperating in North African countries. We subsequently intend to expand this cooperation to other countries, particularly in America and parts of Europe," Scaroni said at the meeting with Putin.

It is anticipated that the companies will begin specific discussions about overseas projects soon.

It would appear Rosneft aims to expand in America, given this and last week's deal with Exxon.

The Exxon deal brings Rosneft into a joint project to develop difficult oil prospects in the U.S., giving Rosneft's Delaware-based subsidiary, Neftegaz Holding America, 30% of Exxon's unconventional La Escalera Ranch project in western Texas. Furthermore, it gives Neftegaz Holding the rights to acquire a 30% stake in 20 of Exxon's Gulf of Mexico blocks. Rosneft subsidiary RN Cardium Oil, meanwhile, will receive 30% of Exxon's stake in a Cardium formation at the Harmattan acreage in Canada's Alberta province.

But the terms for access to the Russian company's projects are not yet known, nor are the reserves and production volumes that Rosneft can expect to book.

No place for our own

While this overseas expansion is under way, private Russian companies are pushing for the right to operate on Russia's shelf. But the law currently prevents this. In a recent letter to Prime Minister Vladimir Putin, the heads of major private oil companies have asked that access to the development of Russia's continental shelf be expanded. Alekperov, Surgutneftegas (RTS: SNGS) chief executive Vladimir Bogdanov, Bashneft (RTS: BANE) President Alexander Korsik and TNK-BP (RTS: TNBP) Executive Director Vladimir Khan wrote in the letter that "one of the key factors that could have a negative impact on the fulfillment of the government exploration program for the continental shelf, based primarily on off-budget financing, is the restriction of access to shelf resources."

Restricting access to selected companies "discourages most Russian companies from active exploration and could prevent the achievement of the expected results of the government program and indicators of socio-economic effectiveness," the letter said.

Rosneft recently sent Russian oil companies a letter with a proposal for operations in Russia's offshore zone.

"We sent this letter to all signatories and made a proposal for offshore operations at all of our projects under the same terms as Exxon, for example," Khudainatov said.

Khudainatov said that this offer was made for 12 sections on Russia's shelf, including the former grey zone of the Barents Sea, Magadan and others.

Exxon owns a 33.3% stake in Rosneft's projects in Russia. ExxonMobil is expected to carry out the financing work during the period of geological exploration.

Only Lukoil agreed to work on these terms. "Rosneft has received our response. We confirmed our agreement. Negotiations proper haven't yet started. Everything is still at the level of initial contact," Lukoil's Alekperov told Interfax on April 25.

Specific sections have not yet been discussed, Alekperov said, adding that "we are interested in all projects."

Khudainatov is allowing for a speedy conclusion of agreements with various foreign companies for work on the Russian shelf and is calling on potential investors to hurry up. "We made offers to many. Look at the work - we are working," he told journalists on April 25. Asked whether he expects to sign new agreements with foreign partners in the near future, Khudainatov said: "Of course."

Asked whether new agreements could be expected with foreign partners in the near future, Khudainatov said: "You see how the world exploded after the order for tax incentives for shelf development. That's why we have always told everyone: You need to hurry," Khudainatov said.

Judging by the fact Rosneft is suggesting that Russian companies work on the same terms as Exxon, and total funding for exploration will not be enough, partners will have to be offered something in exchange. Foreign companies can offer Rosneft a role in their own projects, but what can Russian oil companies offer Rosneft?

Keywords: Russia, Oil, Gas, Energy - Russian News - Russia

 

MOSCOW. April 25 (Interfax) - Only last week Rosneft (RTS: ROSN) signed agreements with ExxonMobil that grant is access to its partner's fields abroad in return for a role in some of its own projects on the Russian shelf. The state-owned Russian oil company signed similar deals with Italy's Eni on April 25 and it doesn't look like limiting itself to two strategic partners.

file photoEni instead of Chevron

The president of Rosneft, Eduard Khudainatov, and the head Eni, Paolo Scaroni, signed an agreement on strategic partnership and an agreement on the creation of a joint venture for the development of the Fedynsky and Central-Barents sections in the Barents Sea and the Western Chernomorsky (Shatsky Ridge) section in the Black Sea. Eni's stake in this JV will be 33.33%. Rosneft and Eni could invest $100 billion-$200 billion in the Russian shelf, just less than is planned in partnership with Exxon.

Eni will provide financing for the geological exploratory work necessary for determining the sections' commercial prospects.

The agreement also calls for exchanging technology and personnel, and Rosneft's involvement in Eni's international projects.

The sections for joint development in Russia hold an estimated 36 billion barrels oil equivalent.

Shatsky Ridge has been offered to foreign companies before. Rosneft and Chevron reached an agreement on the joint development of Shatsky in June 2010, but in March 2011 there were reports that the U.S. company might pull out of the project over differences concerning the geology of the field and assessment of reserves.

Chevron, as it exited the Shatsky project, was unable to reach agreement with Rosneft on the joint development of other offshore projects in Russia, although it very much expected to.

Later, Rosneft said that two companies were contesting for the section. Khudainatov said it would be logical for ExxonMobil to develop it, as the U.S. company is a Rosneft partner at a neighboring section in Tuapse Bay. France's Total might also be a Shatsky Ridge development partner, as that company vied for inclusion in the project several years ago.

The choice was ultimately made in favor of Eni. Khudainatov is confident a discovery will be made in the course of this partnership. "Seismic data and the recent discovery of hydrocarbons in the Romanian section of the Black Sea mean it is highly likely that oil and gas will be found at the Western Chernomorsky field," Rosneft said in a statement.

"I am confident that these projects on the shelf will be successful, and I want to assure you that the Russian government will do everything to support projects of this kind," Russian Prime Minister Vladimir Putin said at a meeting with Eni's Scaroni.

Good at home, but better in America

Rosneft will be able to participate in Eni's international projects under the deal signed on April 25. "Now we are developing cooperation with Rosneft with regards to third countries. There is talk of cooperating in North African countries. We subsequently intend to expand this cooperation to other countries, particularly in America and parts of Europe," Scaroni said at the meeting with Putin.

It is anticipated that the companies will begin specific discussions about overseas projects soon.

It would appear Rosneft aims to expand in America, given this and last week's deal with Exxon.

The Exxon deal brings Rosneft into a joint project to develop difficult oil prospects in the U.S., giving Rosneft's Delaware-based subsidiary, Neftegaz Holding America, 30% of Exxon's unconventional La Escalera Ranch project in western Texas. Furthermore, it gives Neftegaz Holding the rights to acquire a 30% stake in 20 of Exxon's Gulf of Mexico blocks. Rosneft subsidiary RN Cardium Oil, meanwhile, will receive 30% of Exxon's stake in a Cardium formation at the Harmattan acreage in Canada's Alberta province.

But the terms for access to the Russian company's projects are not yet known, nor are the reserves and production volumes that Rosneft can expect to book.

No place for our own

While this overseas expansion is under way, private Russian companies are pushing for the right to operate on Russia's shelf. But the law currently prevents this. In a recent letter to Prime Minister Vladimir Putin, the heads of major private oil companies have asked that access to the development of Russia's continental shelf be expanded. Alekperov, Surgutneftegas (RTS: SNGS) chief executive Vladimir Bogdanov, Bashneft (RTS: BANE) President Alexander Korsik and TNK-BP (RTS: TNBP) Executive Director Vladimir Khan wrote in the letter that "one of the key factors that could have a negative impact on the fulfillment of the government exploration program for the continental shelf, based primarily on off-budget financing, is the restriction of access to shelf resources."

Restricting access to selected companies "discourages most Russian companies from active exploration and could prevent the achievement of the expected results of the government program and indicators of socio-economic effectiveness," the letter said.

Rosneft recently sent Russian oil companies a letter with a proposal for operations in Russia's offshore zone.

"We sent this letter to all signatories and made a proposal for offshore operations at all of our projects under the same terms as Exxon, for example," Khudainatov said.

Khudainatov said that this offer was made for 12 sections on Russia's shelf, including the former grey zone of the Barents Sea, Magadan and others.

Exxon owns a 33.3% stake in Rosneft's projects in Russia. ExxonMobil is expected to carry out the financing work during the period of geological exploration.

Only Lukoil agreed to work on these terms. "Rosneft has received our response. We confirmed our agreement. Negotiations proper haven't yet started. Everything is still at the level of initial contact," Lukoil's Alekperov told Interfax on April 25.

Specific sections have not yet been discussed, Alekperov said, adding that "we are interested in all projects."

Khudainatov is allowing for a speedy conclusion of agreements with various foreign companies for work on the Russian shelf and is calling on potential investors to hurry up. "We made offers to many. Look at the work - we are working," he told journalists on April 25. Asked whether he expects to sign new agreements with foreign partners in the near future, Khudainatov said: "Of course."

Asked whether new agreements could be expected with foreign partners in the near future, Khudainatov said: "You see how the world exploded after the order for tax incentives for shelf development. That's why we have always told everyone: You need to hurry," Khudainatov said.

Judging by the fact Rosneft is suggesting that Russian companies work on the same terms as Exxon, and total funding for exploration will not be enough, partners will have to be offered something in exchange. Foreign companies can offer Rosneft a role in their own projects, but what can Russian oil companies offer Rosneft?

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