Exxon Mobil Corporation (NYSE:XOM)’s joint venture with Rosneft’ NK OAO (MCX:ROSN) has taken a step forward in the pursuit of Arctic Energy.
According to a report published Wednesday, an unnamed source revealed that the two companies were considering adding licenses to an Arctic Shelf joint venture that would widen the frontier within which, the companies can explore energy in the Arctic circle.
The Arctic shelf provides an enormous opportunity for companies looking to explore offshore energy deposits, which as covered earlier, is believed to contain approximately 46 trillion cubic meters of undiscovered global natural gas, equivalent to ~30 percent of the global total. Additionally, geological results revealed that the area has more than 90 billion barrels of undiscovered oil deposits, which is ~13 percent of the global figure.
Several companies have shown interest with Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (NYSE:RDS.B) leading the pack in offshore drilling tests. Shell, began its pilot drilling project in September 2012, but experienced mechanical headwinds and is due to resume drilling in the summer. However, critics have cast a cloud of doubt on Shell’s drilling endeavors in the Arctic.
The company spent nearly $5 billion on permits, personnel and equipment over the past six years to assure regulators and native Alaskans that the first drilling in the U.S. Arctic Ocean in more than a decade would be safe and environmentally benign.
The case of Exxon Mobil Corporation (NYSE:XOM) and Rosneft’ NK OAO (MCX:ROSN) is no different as the exploration process in the Arctic carries the peril of spillage and the potential to pollute the environment.
According to Reuters, Rosneft Chief Executive Igor Sechin told reporters the company is set to sign a new agreement with some of its partners in offshore projects but did not elaborate further. An unnamed source revealed that the state owned Rosneft was referring to 12 licenses signed in partnership with Exxon Mobil. “That would be some of the 12 licenses that Rosneft has recently acquired,” the source said.
Exxon Mobil Corporation (NYSE:XOM) and Rosneft’ NK OAO (MCX:ROSN) have already agreed to jointly tap hydrocarbon deposits in Russia’s Arctic waters and in North America. According to the source, some of the 12 licenses could be used to tap oil and gas in the Barents, Kara, Laptev and Chukchi seas into a joint venture with the North American major.
Rosneft and Exxon Mobil spokespersons declined to comment.