Oil and Gas

Why our projects with Exxon Mobil are key: Rosneft

Reporting by Steve Sedgwick, writing by Dhara Ranasinghe
I cannot understand purpose of sanctions: Rosneft CEO

Two projects with U.S. oil giant Exxon Mobil will be the two most important events for the global oil industry, said Rosneft Chief Executive Igor Sechin who is under sanctions from the U.S. government.

Sechin told CNBC in an interview that Rosneft, Russia's top oil producer, and Exxon would in August start exploration drilling in the Kara Sea, in the center of Russia's north coast.

"It is going to be a significant event for the industry, because according to our sub-surface teams, we can expect large discoveries in this area," Sechin said.

Rosneft chief executive Igor Sechin.
Sasha Mordovets | Getty Images

Exxon, the world's biggest oil company in terms of market value, is seeking closer ties with Rosneft even after the U.S. government imposed sanctions on Sechin, a close ally of Russia's President Vladimir Putin, following Moscow's decision to annex Crimea from Ukraine earlier this year.

In addition to the exploration in the Kara Sea, the companies are working on exploration on Sakhalin Island in the Russia's Far East.

Sechin said the installation of the world's largest unique offshore platform in Sakhalin together with the project in the Kara Sea are "two key events" in the global oil industry.

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In April, Exxon and Rosneft signed a deal to develop three fields in the Arctic with recoverable hydrocarbon reserves estimated at 85 billion barrels in oil-equivalent terms, according to a report from Reuters.

And last month the Russian oil firm, which produces about 40 percent of Russian oil, signed an agreement with BP to jointly explore for hard-to-recover oil in the Volga-Urals region of central Russia.


Asked how important the relationships with global oil firms such as BP and Exxon are to Rosneft's growth strategy, the Rosneft CEO said his company was already part of the global oil sector."I'd like to point out that sometimes we are not perceived in the right way and we are considered as a state-owned company," Sechin said. "And in fact we are an international public company."

BP has a stake of almost 20 percent in Rosneft, while 70 percent of the company is state-owned.

"We understand our responsibility and we will use our best endeavors to guarantee the investments and to make sure that our operations meet all norms and requirements that apply to international public companies," Sechin added.

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Russia meanwhile hopes to repeat the boom in shale oil seen in the U.S. that has changed global energy sector.

"Lately we have been implementing a large number of projects in challenged reserves and shale oil. And our Western partners are leaders, obviously, in this area," said Sechin.

"At the same time the shale oil deposits are located in the areas with developed infrastructure. This is a serious reason for increasing production level from this type of deposits," he added. "We really appreciate our co-operation with our Western colleagues [on this]."

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Russia's recoverable shale oil resources are estimated at 75 billion barrels by the U.S. Energy Information Administration. That's more than the 58 billion barrels held by the U.S. which is currently the leader in shale oil production.