Rosneft and Exxon team up in Gulf of Mexico

42e7o start gulf of mexico deepwater joint venture Rosneft and Exxon team up in Gulf of Mexico

The American company will put$3.2 billion towards the initial stage ofexploration.The formal agreement between the two oil companies was signed onMarch 5 by Igor Sechin, president of Rosneft, and Stephen Greenlee,the head of ExxonMobil Exploration.”This agreement provides Rosneft and its affiliates withaccess to one of the world’s most prolific basins,” saidSechin.The 20 blocks have a total area of about 111,600 acres (450square kilometers) in water depths ranging between 2,100 and 6,800feet (640 and 2,070 meters). Seventeen of the blocks are in theWestern Gulf, and three in the Central.In exchange, Rosneft will grant ExxonMobil access to jointexploration projects in the rich and largely untapped Black Sea andArctic shelves.Rosneft gains access to a reliable area that has long andsuccessfully yielded profit, which balances out the risks of itsArctic operations.Production of oil in the Gulf is forecast to increasesubstantially over the next few years, possibly reaching an outputof 1.9 million barrels per day, a record high, according to RichieBaud, MMS deputy regional supervisor for the Office of Productionand Development.Deep water is the hottest extraction trend in the Gulf, as most‘big’ discoveries are being made below 5,000 feet. The ultra-deepwater strategy, however, complicates drilling and production andrequires the most up to date technology. There are 7,310 activeleases in the Gulf of Mexico, 58% of which are deep water,according to Offshore.”We look forward to working with Rosneft and its affiliatesto explore these blocks using our leading-edge exploration anddevelopment technology and deep water execution expertise,”said Greenlee.This is just the latest in a series of joint ventures betweenthe two oil titans.In February, Rosneft and ExxonMobil agreed to expand theircooperation under their 2011 Strategic Cooperation Agreement toinclude an additional 600,000 square kilometers in the RussianArctic, as well as a Far East liquefied natural gas explorationproject.The blocks are not yet producing oil and seismic data is stillbeing compiled and analyzed, ExxonMobil said on Wednesday.

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Rosneft and Exxon team up in Gulf of Mexico

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