Exxon Russia Ambitions Show Oil Trumps Obama-Putin Spats
By Stephen Bierman - Jan 2, 2014
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 discoveries together in the Arctic Ocean.
Exxon Mobil Corp. (XOM) and OAO Rosneft (ROSN) are set to start their first Arctic well this year, targeting a deposit that may hold more oil than Norway’s North Sea. It will kick off a series of landmark projects and cement an alliance begun in 2011. They also plan to frack shale fields in Siberia, sink a deep-water well in the Black Sea and build a natural-gas export terminal in Russia’s Far East.
“We have a unique partnership,” Glenn Waller, Exxon’s Russian chief, said in an interview in Moscow. “They have the world’s biggest reserves and we have the largest market capitalization.”
The deepening alliance shows the two governments’ fractious relationship is no bar to America’s most valuable energy company investing billions in Russia. For Rosneft Chief Executive Officer Igor Sechin, the Irving, Texas-based company brings financial heft and the expertise needed to drill offshore in some of the world’s harshest conditions for rigs.
“There’s a whole stack of reasons why it’s good that Rosneft is working with Exxon,” said Richard Sakwa, an associate fellow at Chatham House in London, who writes on Russia’s oil industry. “There’s technology and management. Between Sechin and Exxon, there’s a degree of trust being built up that can be nothing but to the good” to both and to Russia.
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http://www.bloomberg.com/news/2014-01-02/exxon-s-russia-ambitions-show-drilling-trumps-obama-putin-spats.html