Rosneft, BP To Explore For Shale Oil In Russia

Posted By Joseph R. Fonseca
Sunday, May 25, 2014

 

Rosneft and BP signed an agreement on Saturday to jointly explore for hard-to-recover oil in Russia, the first major deal for the state-run Russian oil company since the West imposed sanctions over Ukraine in March.

Rosneft chief executive Igor Sechin, a close ally of President Vladimir Putin, has been targeted by U.S. sanctions along with some other members of Putin's so-called inner circle following Russia's annexation of Crimea from Ukraine in March.

Western energy bosses saved the St Petersburg International Economic forum from a complete failure by effectively standing by Russia as heads of top banks and many other firms did not show up for fear of reprisals over the sanctions.

"Our country has a goal not only to sustain and improve positions of one of the leading energy suppliers but to become one of the leaders of starting transformation of the global energy," Putin told the forum on Saturday.

Russia is the world's leading oil producer with current output of around 10.5 million barrels per day (bpd) but the bulk of production is coming from depleted western Siberian deposits.

Moscow is hoping to repeat the shale oil boom in the United States, which changed the global energy landscape as Washington is gradually cutting oil imports and preparing to start exports, pushing other producers like Russia to forge closer business ties with Asia.

With Putin attending the ceremony, Sechin and BP Russia head David Campbell signed an agreement at the St Petersburg International Economic Forum to jointly explore for hard-to-recover oil in the Volga-Urals region of central Russia.

Rosneft will hold 51 percent of the joint venture which will explore the so-called Domanic formation and BP will hold 49 percent. BP holds an almost 20 percent stake in Rosneft.

"We are very pleased to be a part of Russian energy complex," Bob Dudley, chief executive with BP, told the forum. He was also present at the signing but did not sign it himself.

"President (Putin) has urged us today to invest into shale oil... There's so many natural resources in Russia, the openness and partnerships Russia has with companies from all over the world is a good thing for energy," Dudley said on Saturday after meeting Putin in private along with other energy executives.

Earlier this week, Russia and China signed a gas contract worth $400 billion against the background of the worst East-West standoff since the Cold War. Moscow is already supplying oil to Asia via the East Siberia-Pacific Ocean pipeline.

The U.S. Energy Information Administration estimates Russian recoverable shale oil resources at 75 billion barrels, more than the 58 billion barrels held by the United States, now the leader in shale oil production.

Rosneft has previously also reached agreements with ExxonMobil of the United States and Norway's Statoil to explore for hard-to-recover oil.

 

BUSINESS AS USUAL

Global energy executives at the forum included Royal Dutch Shell's Ben van Beurden, Total's Christophe de Margerie, Eni's Claudio Descalzi and ExxonMobil Development Company's Neil Duffin.

Most of them kept a low profile or had a short message to deliver - business as usual.

"My message to Russia is simple - business as usual," said de Margerie who signed a deal with private Russian firm Lukoil to explore for unconventional oil during the forum.

Dudley, who had bumpy relations with Russia as head of TNK-BP, now part of Rosneft, told reporters that BP is not going to sell its stake in Rosneft.

"I think it is important to come and to watch and listen... to where the things are going... We have responsibility to stand with our partners in difficult time," he said.

Some of Western energy executives, including from U.S. ExxonMobil, attended Rosneft party outside St Petersburg on Friday night, an industry source told Reuters, with Sechin thanking everyone for coming and calling to work hard further.

"We checked with compliance (depaartment) all the nuances regarding Russia. What we cannot do is to deal with Sechin as an individual but we can deal with him as president of Rosneft," an executive from a western oil major said.

(Reporting by Katya Golubkova, Vladimir Soldatkin and Denis Pinchuk; Additional reporting by Masha Kiselyova, Dmitri Zhdannikov, Alexei Anishchuk and Lidia Kelly; Writing by Katya Golubkova; Editing by Timothy Heritage and Stephen Powell)

Maritime Reporter April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

DNV GL Names Remi Eriksen Group CEO

Remi Eriksen has been appointed as the DNV GL Group’s new president and CEO, succeeding Henrik O. Madsen, who will retire August 1. The DNV GL board of directors

Aramco Offers Rare 1.5 pct Gasoil Cargo

Aramco Trading, the trading arm of oil producer Saudi Aramco, has offered a rare gasoil cargo with a 1.5 percent sulphur content for June lifting from Rabigh, traders said on Thursday.

Golden Ocean: Worst Bulk Market Since 1980s

Dry bulk shipping firm Golden Ocean reported first-quarter earnings below forecasts on Thursday and said its market had gone from "bad to worse" with market conditions not seen in three decades.

Contracts

GE Gas Turbine to Power USCG Cutter

GE LM2500 gas turbine to power United States Coast Guard‘s eighth National Security Cutter   GE Marine reports that its LM2500 gas turbine will power the United

U.S.: Stronger Response in South China Sea Needed

By releasing video of Beijing's island reclamation work and considering more assertive maritime actions, the United States is signaling a tougher stance over the

Aramco Offers Rare 1.5 pct Gasoil Cargo

Aramco Trading, the trading arm of oil producer Saudi Aramco, has offered a rare gasoil cargo with a 1.5 percent sulphur content for June lifting from Rabigh, traders said on Thursday.

Legal

Israeli Port Workers Defy Court Order to Continue Strike

Striking Israeli dockworkers defied a court order on Thursday and shut down the country's two main seaports for a second day in protest at the creation of two new foreign-run ports.

Executive Changes at Transocean

Transocean Ltd. today announced that, as mutually agreed with the company, Esa Ikaheimonen is stepping down as Executive Vice President and Chief Financial Officer effective immediately.

BMT, Endeavour Energy Win Africa’s LNG Import Terminal Contract

BMT Asia Pacific (BMT), a subsidiary of BMT Group Ltd, has been appointed Owners Engineer and lead design consultant by Endeavour Energy for the development

Energy

DNV GL Names Remi Eriksen Group CEO

Remi Eriksen has been appointed as the DNV GL Group’s new president and CEO, succeeding Henrik O. Madsen, who will retire August 1. The DNV GL board of directors

U.S.: Stronger Response in South China Sea Needed

By releasing video of Beijing's island reclamation work and considering more assertive maritime actions, the United States is signaling a tougher stance over the

Aramco Offers Rare 1.5 pct Gasoil Cargo

Aramco Trading, the trading arm of oil producer Saudi Aramco, has offered a rare gasoil cargo with a 1.5 percent sulphur content for June lifting from Rabigh, traders said on Thursday.

News

Israeli Port Workers Defy Court Order to Continue Strike

Striking Israeli dockworkers defied a court order on Thursday and shut down the country's two main seaports for a second day in protest at the creation of two new foreign-run ports.

New Ferry Safety Initiative from RINA

Italy-based classification society RINA informs it has launched a ferry safety initiative.    The Asset Integrity Management scheme for ro-pax ferries covers fire risk mitigation,

Korean Register Opens Green-ship Certification Center

The Korean Register informs it has formally opened the Green-ship Equipment Test Certification Center in Gunsan, Jeonbuk, Korea.   This large-scale facility will

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Offshore Oil Pod Propulsion Salvage Ship Electronics Ship Simulators Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2601 sec (4 req/sec)