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UPDATE 1-BP looks at tough onshore Russian projects with Rosneft
June 20, 2013 / 4:12 PM / 4 years ago

UPDATE 1-BP looks at tough onshore Russian projects with Rosneft

* BP to seek onshore oil deal after failed Arctic deals

* British major to offer skills and technology to Rosneft

* Might be interested in Russia’s shale reserves

By Melissa Akin

ST PETERSBURG, June 20 (Reuters) - BP Chief Executive Bob Dudley said the British major would look at direct participation in “really difficult” Russian onshore oil ventures with Rosneft, which already has an exploration deal with ExxonMobil.

Rosneft confirmed at an annual general meeting on Thursday that Dudley would have a seat on its board after BP’s acquisition of a 20 percent stake earlier this year.

BP lost previous exploration deals focused on Russia’s Arctic offshore fields to Exxon. Statoil and Eni also have exploration ventures in the Arctic.

“The Arctic projects are for the next decade. Onshore can be done earlier,” Dudley said, noting that BP effectively owned 20 percent of Rosneft’s stake in the joint exploration ventures.

He also said BP might be interested in tapping some of Russia’s shale oil reserves, a focus of interest for Exxon.

Russia has some of the world’s largest shale and other tight oil resources, but they remain largely untapped as it is works its way through conventional reserves and as high taxes make unconventional plays unprofitable.

Rosneft sees its shale plays as a way to attract new production technology, which has put the United States, the world’s largest petroleum consumer, within reach of self sufficiency.

After a long period of isolation which some analysts saw as tantamount to resource nationalism, Rosneft first opened its doors to a foreign major when BP agreed to an initial exploration and share swap deal with the Russian state company.

That deal drew objections from BP’s partners in venture TNK-BP, ultimately triggering BP’s exit and its tie-up with Rosneft, but ExxonMobil had already snatched the acreage sought by BP in the Kara Sea, then further parcels in the Laptev Sea earlier this year.

BP would look to deploy its own skills and technology, including waterflood management technology, as part of a potential deal for direct participation in an exploration or production venture with Rosneft.

Waterflood management is a pervasive problem for Russia’s older fields, especially those previously owned by TNK-BP, as well as a few remote new fields.

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