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April 19, 2012 at 15:13 PM EDT
Exxon-Rosneft Deal Centers on Arctic Oil (NYSE: XOM)
Quite a few emails already coming in about the potential of the $3.2 billion Exxon-Rosneft deal. On April 16, Exxon (NYSE: XOM ) officially entered into a massive offshore exploration partnership with Russia's Rosneft to jointly develop resources in the Kara and Black Seas. From the Rosneft press release : "The agreements signed today form joint ventures to manage an exploration program in the Kara Sea and Black Sea. They also set the terms for investments to be made by the partners in Russian offshore projects. The initial cost of preliminary exploration is estimated at over US $3.2 billion. Neftegaz Holding America Limited, an independent indirect subsidiary of Rosneft registered in Delaware, concluded separate agreements on the acquisition of a 30 percent equity in ExxonMobil's share in the La Escalera Ranch project in the Delaware Basin in West Texas in the United States." To continue reading, please click here...
Quite a few emails already coming in about the potential of the $3.2 billion Exxon-Rosneft deal.

On April 16, Exxon (NYSE: XOM) officially entered into a massive offshore exploration partnership with Russia's Rosneft to jointly develop resources in the Kara and Black Seas.
From the Rosneft press release:

"The agreements signed today form joint ventures to manage an exploration program in the Kara Sea and Black Sea. They also set the terms for investments to be made by the partners in Russian offshore projects. The initial cost of preliminary exploration is estimated at over US $3.2 billion.

Neftegaz Holding America Limited, an independent indirect subsidiary of Rosneft registered in Delaware, concluded separate agreements on the acquisition of a 30 percent equity in ExxonMobil's share in the La Escalera Ranch project in the Delaware Basin in West Texas in the United States."

The deal may be valued in the media as $3.2 billion, but this figure is really just the tip of the Arctic iceberg.

Over the next decade, up to $200 billion will be spent on joint projects, and the pipeline projects will be numerous. At least 10 ice-proof platforms will be required in the Kara Sea at a starting price tag of $15 billion each.

This is just another reminder that the roof of the world appears to be the next major destination for the largest oil companies.

Just last month Royal Dutch Shell (NYSE: RDS) began contracting Finnish icebreakers to accompany them in test drillings in the Arctic. In February, TNK-BP, a joint venture between Russian tycoon firms and British energy giant BP (NYSE: BP), announce it will finish a drilling campaign in Yamal-Nenets, an Arctic region with up to 2.25 billion barrels of oil.

With fewer conventional resource pools available around the world, the majors are clamoring to get a piece of the action.

According to the U.S. Energy Information Administration, as much as 22% of the world's undiscovered oil and up to 30% of its natural gas could be in the Arctic Circle alone.

There are 19 geological basins in the Arctic region, but only half of them have been explored.

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Tags: (nyse: xom), Arctic oil, Exxon, Exxon-Rosneft Deal
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