On December 7, the largest Russian oil company Rosneft signed an agreement with the American oil producer ExxonMobil for the development of a pilot project for the extraction of hard-to-reach reserves in Western Siberia, Rosneft announced. It has been reported that within the framework of the agreement, the companies will work together to assess the possibilities of commercial production of heavy oil from the Bazhenov and the Achimov formations in Western Siberia. The companies will create a joint venture for the purpose of program development work and possible future commercial production, in which Rosneft will hold 51 percent and ExxonMobil 49 percent. Construction works will begin at Rosneft’s 23 licensed sites with the total area of 10,000 square kilometers. The declaration was signed at the meeting of the President of Rosneft Igor Sechin and the head of ExxonMobil Rex Tillerson in the presence of senior executives from both companies. Also, it is reported that ExxonMobil will provide funding of up to USD300 million for the development program. “Program development work involves carrying out preparatory tasks on a number of fronts, including the drilling of new horizontal and vertical wells with modern technology of hydraulic fracturing, the deepening of existing wells, the  development of idle wells, the implementation of special core analysis, including geomechanical studies. Drilling will begin in 2013,” Rosneft’s release announced. Upon the completion of program development work in 2015, the companies will jointly select sites for commercial development, where economically feasible commercial development can take place to increase production in the Western Siberian Basin of Russia.

Commenting on the agreement, Igor Sechin said, “Getting the most production from each field and the search for new technologies to utilize the potential of low-permeability reservoirs are strategic priorities for the Company. I am confident that the expertise and infrastructure of Rosneft in Western Siberia, in combination with the advanced technology of our partner ExxonMobil will allow us to engage in the development of hard-to-reach oil reserves. Rex Tillerson, in turn, said that the strategic combination of the work experience of Rosneft with ExxonMobil’s modern technology developed during the production of hard-to-access oil sites in North America and other regions of the world created the perfect conditions for exploring the Russian fields and launching full-scale development of those projects.

A declaration on environmental protection and the conservation of biological diversity in the exploration and development of oil and gas resources of the Arctic continental shelf of the Russian Federation was also signed by the executives of the two companies. The declaration includes a number of measures for the conservation of the Arctic in the exploration and development of oil and gas resources by Rosneft and its partners. The parties also agreed to form a joint working group to consider the establishment of a focal point, which may include representatives of Roscosmos, the Ministry of Transportation, and the Ministry of Emergency Situations of Russia.