|Putin hailed the deal as a "truly strategic partnership", lauding Exxon for its extensive drilling experience [Reuters]
Russia's state-owned Rosneft has signed a multibillion dollar deal with Exxon Mobil to develop offshore oil fields in the Russian Arctic in the largest Russian oil deal in recent years.
Rex Tillerson, the Exxon Chief Executive and Deputy Prime Minister Igor Sechin, Russia's top energy official, signed a "strategic partnership" deal on Tuesday in the Black Sea resort of Sochi, in the presence of Vladimir Putin, the Russian prime minister.
Exxon and Rosneft agreed to invest $3.2bn on exploring three giant undeveloped oil and gas fields in the Kara Sea, between the northeastern corner of continental Russia and the Arctic archipelago of Novaya Zemlya, in the Arctic as well as a sector in the Black Sea.
Putin estimated the total investment in the project at a massive $500bn over an unspecified number of years.
Exxon Mobil and Rosneft first struck a deal in January to develop a sector in the Russian part of the Black Sea.
Roseneft, which is 75 per cent owned by the Kremlin, had been looking for partners with technology for deep sea drilling, which it lacks, to develop the offshore projects in the Arctic and other regions of Russia.
Rosneft had signed an accord with Britain's British Petroleum (BP) in January to jointly develop the Arctic, but that agreement fell through, after BP's Russian shareholders managed to block it.
Sheila Williams, a BP spokeswoman, did not comment on the deal but said BP is still "committed both to Russia and to the continuing success" its Russian venture.
Tillerson said in the statement that the deal "takes our relationship to a new level and will create substantial value for both companies.''
Sechin, the deputy prime minister, said Rosneft will get shares in at least six Exxon Mobil projects in the US, without specifying the plots' locations.
The shares "will be in proportion to the ones Exxon will get by working in the Russian projects," he told the Interfax news agency.
"I'd like to emphasise the exclusivess of these decisions for Russian companies ... that until today were not able to develop existing deposits in the US."
Sechin also said that Exxon Mobil could get a share in other projects in the Black Sea.
The Russian Arctic is one of the last regions with immense and untapped hydrocarbon deposits.
Exxon, the US oil giant, already has experience drilling in the Arctic regions of Canada.