Rosneft and ExxonMobil today signed a cooperation agreement covering joint work in the development of the Russian firm's tight oil reserves in west Siberia.
The two firms agreed to expand and expedite joint efforts to develop oil reserves in tight low-permeability formations in West Siberia using advanced technologies that ExxonMobil has successfully employed in North America, ExxonMobil says. Today's agreement builds on earlier agreements under which Rosneft and ExxonMobil are jointly exploring the former's offshore blocks in the Arctic Kara sea and the Black Sea.
Like most of its Russian peers, Rosneft has considerable tight oil reserves focused in the Bazhenov formation in west Siberia where conventional crude reserves are declining fast. But Rosneft has no experience or technology to produce from these reserves and is counting on ExxonMobil's help. To gain tight oil experience, Rosneft recently agreed to take a minority role in ExxonMobil's three similar projects in the US and Canada.
A pilot programme will determine the technical feasibility of developing the reserves. In the near future, Rosneft and ExxonMobil will approve a work programme for selected Rosneft licence blocks that will include geological studies and drilling of Bazhenov and Achimov reservoirs. Drilling is scheduled to begin in 2013. ExxonMobil will finance the geological studies and exploratory drilling. Participating interests in a potential development phase will be 66.67 pc for Rosneft and 33.33 pc for ExxonMobil.
In one of his last acts as prime minister, Russia's President Vladimir Putin, who attended today's signing ceremony, last month provisionally approved tax breaks for west Siberia's vast hard to recover oil reserves.
Tight oil accounts for 4pc of Russia's 10.3mn b/d crude output. The energy ministry says development of hard to recover reserves could boost crude production by up to 2mn b/d. Rosneft estimates it has 2.5bn t (18.25bn bl) of Bazhenov formation reserves.