Russia’s State-Run Rosneft Says Exxon Arctic Well Strikes Oil
Russias state-run OAO Rosneft (ROSN) said a well drilled in the Kara Sea region of the Arctic Ocean with Exxon Mobil Corp. (XOM) struck oil, showing the region has the potential to become one of the worlds most important crude-producing areas.
The announcement was made by Igor Sechin, Rosnefts chief executive officer, who spent two days sailing on a Russian research ship to the drilling rig where the find was unveiled today. The well found about 1 billion barrels of oil and similar geology nearby means the surrounding area may hold more than the U.S. part of the Gulf or Mexico, he said.
It exceeded our expectations, Sechin said in an interview. This discovery is of exceptional significance in showing the presence of hydrocarbons in the Arctic.
The discovery also sharpens the dispute between Russia and the U.S. over President Vladimir Putins actions in Ukraine. The well was drilled before the Oct. 10 deadline Exxon was granted by the U.S. government under sanctions barring American companies from working in Russias Arctic offshore. Rosneft and Exxon wont be able to do more drilling, putting the exploration and development of the area on hold despite the find announced today.
The development of Arctic oil reserves, an undertaking that will cost hundreds of billions of dollars and take decades, is one of Putins grandest ambitions. As Russias existing fields in Siberia run dry, the country needs to develop new reserves as it vies with the U.S. to be the worlds largest oil and gas producer.
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http://www.bloomberg.com/news/2014-09-27/rosneft-says-exxon-arctic-well-strikes-oil.html