Pm Fundamentals

Purpose of the report

This report is prepared for Exxon Mobil Board and US Congressional Oversight Committee for acceptance of the Strategic Cooperation Agreement under which the two organisations plan to undertake joint exploration and development of hydrocarbon resources in Russia, the United States and other countries throughout the world, and commence technology and expertise sharing activities.

Project Background

Exxon Mobil has formed an Arctic exploration partnership with Rosneft, the Russian state oil company. In return, Exxon, the world’s largest oil company by market capitalisation, will give the state-controlled Russian group minority stakes in projects in the US Gulf of Mexico, in onshore fields in Texas and elsewhere. The deal underscores international oil companies’ determination to explore and develop the Russian Arctic, one of the few places in the world with large, untapped oil and gas reserves, and Russia’s recognition that it needs international help to exploit those resources. (The Financial Times 2011)

    Figure 1: Kara sea operation area


The aim is to develop strategic partnership between Exxon and Rosneft in exploration of Russian Arctic and Black sea. This cooperation is as important for companies businesses as it is significant politically for both countries relationship.
First production from Kara Sea blocks to be started in next decade (Market Watch 2011)


Initial step of the project is a $3.2b exploration program on Prinovozemelsky blocks in Kara Sea and Tuapse block in Black Sea.
The Prinovozemelsky blocks of the Kara Sea have been explored using 2D seismic. Estimated recoverable oil resources in the three blocks stand at 6.2 billion tons and hydrocarbon resources at up to 20.9 billion tons of oil equivalent (Rosneft 2011). First exploration well is scheduled for drilling in 2015. Data received from the exploration phase to be analyzed and option for further field development chosen....