Exxon signs deal to possibly make Rosneft a Point Thomson partner

Are the Russians coming to Alaska’s North Slope?

Could be.

On Feb. 13, ExxonMobil and Rosneft announced out of Moscow that they had agreed to expand their 2011 “strategic cooperation agreement” to include an additional 150 million exploration acres in the Russian Arctic and “potential participation by Rosneft (or its affiliate) in the Point Thomson project in Alaska.”

ExxonMobil further said the companies had agreed to conduct a joint study on a potential liquefied natural gas, or LNG, project in the Russian Far East.

ExxonMobil is operator of the Point Thomson field, situated on state-owned land on the eastern North Slope about 60 miles east of Prudhoe Bay. The company is embarking now on construction of a project to produce natural gas condensate from Point Thomson, which is considered one of the richest undeveloped oil and gas accumulations in North America.

Full development of Point Thomson is expected to require billions of dollars in investment. ExxonMobil isn’t going it alone, as BP and ConocoPhillips also are stakeholders in the field.

The condensate development is proceeding under a legal settlement the companies struck with the state of Alaska on March 29, 2012. ExxonMobil has pledged field startup by May 2016, with a modest initial production level of 10,000 barrels per day of condensate.

The expectation is that, down the road, much greater volumes can be pulled from Point Thomson formations, which are believed to hold 8 trillion cubic feet of natural gas, 200 million barrels of recoverable condensate plus some crude oil.

Chevron replacement?

Assignment of Chevron’s 11.6 percent working interest in Point Thomson bumped up ExxonMobil’s share to 68.3 percent, with BP holding 27.2 percent, ConocoPhillips 3.2 percent, and 20 others combining for 1.2 percent.

A Chevron spokesman told Petroleum News on April 3, 2012, that “we determined that Point Thomson is unable to compete for capital with other global opportunities in Chevron’s portfolio.”

Could it be that Point Thomson holds greater appeal for Rosneft? And that ExxonMobil sees the Russian oil giant as a replacement for Chevron?

“Participation in the Point Thomson project will increase Rosneft’s access to the latest gas and condensate field development technologies used in harsh climatic conditions,” Igor Sechin, president of Rosneft, said in the Feb. 13 press release.

The release said Sechin and Stephen Greenlee, president of ExxonMobil Exploration Co., signed agreements to explore seven new blocks in the Chukchi Sea, Laptev Sea and Kara Sea. Rosneft’s website had a photo of Russian President Vladimir Putin standing over the two company men as they signed.

A separate “heads of agreement,” or preliminary deal, was signed providing Rosneft, or its affiliate, with an option to acquire a 25 percent interest in the Point Thomson unit, the release said.

Alaskans react, and the BP angle

Elizabeth Bluemink, a spokeswoman for the Alaska Department of Natural Resources, said DNR officials were informed of the ExxonMobil-Rosneft agreement late Feb. 12, the day before the deal was announced.

She provided this statement from DNR Commissioner Dan Sullivan:

“Any lease assignments must be approved by the state. We will be analyzing such a request for assignments if and when it is received. Additionally, any new working interest owner would need to comply fully with the Point Thomson settlement terms.”

Rosneft is a state-owned Russian oil titan that has made other big deals recently with Western oil and gas firms.

In November, BP announced it had signed binding agreements to sell its half of the Russian oil and gas company TNK-BP to Rosneft for $17.1 billion in cash plus shares in Rosneft. At the conclusion of this and related transactions, BP said it would own 19.75 percent of Rosneft.

—Wesley Loy