ExxonMobil Signs Huge $500 Billion Deal For Russian Arctic Oil

Russian Flag Under Arctic Sea

[credit provider=”AP Photo/Association of Russian Polar Explorers”]

American oil company ExxonMobil has signed a huge deal with Russian company Rosneft to begin exploring the Russian-controlled parts of the Arctic for oil, reports the New York Times.Exxon’s deal looks likely to have destroyed hopes by BP to be the first into the region. BP had a deal with Rosneft but that deal expired earlier this year, reports the BBC.

Prime Minister Vladimir Putin oversaw the signing of the deal on Tuesday. Rosneft is owned by the Russian government.

Putin told reporters that the deal may eventually see $500 billion worth of investments.

The key agreements from the press release:

  • US $3.2 billion exploration program planned for Kara Sea and Black Sea
  • Establishment of a joint Arctic Research and Design centre for Offshore Development in St. Petersburg
  • Rosneft participation in ExxonMobil projects in the U.S. and other countries with a focus on building offshore and tight oil expertise
  • Joint operations to develop Western Siberia tight oil resources
  • Companies form partnership to undertake projects in the Russian Federation and internationally

In exchange for the Arctic exploration, the Times reports, Exxon has given Rosneft the rights to some assets elsewhere in the World. It’s not clear at present if any of these points will be in Texas or the Gulf of Mexico. Arctic drilling is largely off-limits in Alaska.