Russia's largest oil company Rosneft and US hydrocarbon major ExxonMobil have given up joint extraction development in the Gulf of Mexico, following the abandonment of Arctic their planned projects, Rosneft said on December 2.
The announcement effectively seals the divorce of the state-controlled Russian company from one of its largest overseas partners. ExxonMobil had already pulled out of a number of joint projects due to US sanctions imposed on Russia in 2014 over Ukraine. This most notably sounded the end of their exploration of technically challenging Arctic offshore fields.
"Due to low oil prices and unsatisfactory results of the geological exploration works, as well as potential sanction limitations, the partners will give up the licenses prematurely by the end of 2016," an unnamed Rosneft representative told Reuters.
Rosneft acquired the 30% share in 20 oilfield blocks held by ExxonMobil in the Gulf of Mexico in 2013, as part of the asset exchange for joint exploration of the Arctic Kara Sea. Planned joint drilling operations for several licences in the Kara Sea were reportedly worth a total $3.2bn, with the oil fields there said to be bigger than those off Mexico.
Despite ExxonMobil pulling out of the Arctic operations, Rosneft said in September it will still reactivate several large offshore shelf extraction projects, including drilling in the Kara Sea and the Pacific Sea of Okhotsk.
The increased offshore drilling is notable in the context of oil output gains for Russia overall, as its shelf fields are the main resource base for long-term oil extraction growth for the world's largest energy exporter.
Offshore projects were put on hold due to Western sanctions, which also target the transfer of extraction technology from foreign oil companies that Russian companies like Rosneft require.
However, difficulties in the joint offshore work were not related to sanctions and the postponements not caused by lack of access to drilling equipment but the need for better planning, Rosneft officials said.
|Rosneft - KEY METRICS|
|Financials, $ mln|
|Net income 9,238 8,299||8,619||6,688||3,291||6,265|
|EPS (adj), $||0.87||0.63||0.31||0.59|
|Valuation, Gearing and Yield|
|Russian government (Rosneftegaz)||69.50%|
|Strategic investors (Petronas, CNPC)||2.00%|
|Other (free float)||8.70%|
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