* Tillerson first CEO to greet Putin in Vladivostok
* ExxonMobil, Rosneft working in "challenging circumstances"
* To start drilling in Kara Sea 2014-15
By Gleb Bryanski
VLADIVOSTOK, Russia Sept 6 The head of
ExxonMobil held up a partnership with Russia's Rosneft
as a model for the rest of the world, lending
international credibility to President Vladimir Putin at a time
when his authoritarian style faces mounting criticism.
ExxonMobil's Rex Tillerson, flanked by Rosneft CEO Igor
Sechin, was the first foreign CEO to greet Putin ahead of the
Asia-Pacific economic summit held in the sea port of
Vladivostok, nine hours by plane east of Moscow.
Putin, while still serving as prime minister before
returning to the Kremlin for a third term in May, presided over
ExxonMobil's deal to join forces with state-controlled Rosneft
to drill for oil in Russia's offshore zones and tap
"tight" oil reserves in Siberia.
ExxonMobil and Rosneft unveiled the offshore exploration
partnership that could invest up to $500 billion in developing
Russia's vast energy reserves in the Arctic and Black seas in
New York in April.
Under the deal Exxon and Rosneft will seek to develop three
fields in the Arctic with recoverable hydrocarbon reserves
estimated at 85 billion barrels in oil-equivalent terms.
"For the world, the political leadership, policy
partnerships that have made our relationship possible serve as a
model illuminating the path to a better future," Tillerson told
Putin during a presentation.
"For Russia this relationship is already bearing fruit in
terms of new investment, innovations, new possibilities,"
ExxonMobil's expansion into Russia is taking place amid new
uncertainty in relations between the two Cold War foes following
Putin's return to the Kremlin and ahead of the U.S. presidential
Putin has also faced growing opposition at home as tens of
thousands of people took to the streets of Moscow and other
large cities with allegations of ballot fraud after last
December's parliamentary election and some investors are worried
about signs of a crackdown.
The U.S. government joined European nations in openly
criticising Russia for the jail sentences handed to three
members of Pussy Riot, a punk band which protested against Putin
in a church.
At the same time, Tillerson and other ExxonMobil executives
have enjoyed an increasingly cozy relationship with Rosneft and
the Kremlin, and mingled with Rosneft executives and Kremlin
officials at a fuel storage facility outside Vladivostok's new
He said ExxonMobil and Rosneft will work in "challenging
circumstances" seeking to meet the growing global energy demand
which he expects to grow by 30 percent by 2040.
Tillerson said seismic studies at the Arctic Kara Sea oil
exploration project with Rosneft were ahead of schedule and he
expected drilling to commence in 2014-15.
"With this data on the Kara Sea in hand and analysed we
expect the drilling of an exploration well in the 2014-15 time
frame," he said.
Tillerson said he saw potential for exploration drilling in
the Black Sea also in 2014-15. Sechin said he hoped the drilling
in the Kara Sea will start in 2014.
Putin, who has repeatedly said that increased trade and
closer economic ties were key to improving the broader
relationship with the U.S., listened carefully, asking in the
end how ExxonMobil would ship oil extracted in the Kara Sea.
"We will undertake a study of a couple of different
alternatives, most likely through the north west, through some
of the shipping lanes whose current activity is shipping
minerals from the mines in the area," Tillerson said.
"It may be piped to the shore, to the terminal," he said,
adding a decision would depend on where oil was found.