BP out in the cold as Exxon inks deal with Rosneft

Kasmira Jefford
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EXXONMOBIL has won a highly coveted contract with Russia’s Rosneft to develop offshore oil fields in the Arctic.

The $3.2bn (£1.96bn) deal comes as a major blow for British rival BP, who just seven months ago announced “a groundbreaking strategic global alliance” with Russia’s state-owned oil company that was later abandoned after objections from shareholders in BP’s Russian venture, TNK-BP.

The agreement announced yesterday gives the biggest US oil company access to explore the same three licence blocks in the Kara Sea that were central to BP’s “historic agreement” with Rosneft announced in January.

After a surprise signing by Prime Minister Vladimir Putin yesterday at the Black Sea resort of Sochi, ExxonMobil has agreed to hand Rosneft unspecified assets, including some that the company owns in the deepwater zones of the Gulf of Mexico and onshore in Texas.

This compares to the BP deal, which called for a $16bn share swap in which BP would exchange a five per cent stake for 9.4 per cent in Rosneft.

The deal marks the most significant US-Russian corporate deal since President Barack Obama began a push to improve ties, which analysts say was aimed at reducing the political risk for businesses working in Russia.