Thursday, April 19, 2012
Agence France Presse reported a week ago that Vladimir Putin vowed Thursday to win $500 billion in investment for Russian offshore field development over 30 years to tap the country's full energy potential with the help of foreign expertise.
Putin outlined a broad new and largely business-friendly energy vision whose implementation will be vital to the success of his third term as president following a wave of protests that greeted his March election win.
Russia's president-elect promised to cancel export duties on new projects for its vast and mostly unexploited Arctic shelf and other offshore fields as an incentive for their rapid development.
He also laid down clear guidelines that require 70 to 75 percent of offshore projects to be remain under Russian ownership while relaxing some tax legislation.
And he vitally signalled an imminent change in the rules that permit private Russian players to compete openly for the development of the lucrative fields against the state-owned oil and gas champions Rosneft and Gazprom.
A related story from Reuters is even more edifying: Rosneft and Exxon Mobil Corp wrapped up a landmark alliance on Monday that will secure vital know-how and upstream access to North America for the Russian state oil firm and bulk up the U.S. major's global reserves base.
The wide-ranging deal will grant Rosneft access to three projects in North America, where Exxon is developing hard-to-recover reserves in West Texas, the Canadian province of Alberta and in the Gulf of Mexico.
The two companies will also seek to transfer know-how from those projects to develop Rosneft's own vast reserves of so-called 'tight' oil trapped in non-porous rocks like shale at three of its biggest fields in Western Siberia.
"Today really is a historic day ... it marks the beginning of a new and broader relationship between our companies," Exxon CEO Rex Tillerson told a signing ceremony hosted by Prime Minister Vladimir Putin at his Novo-Ogaryovo residence outside Moscow.
Fears of environmental damage and global warming are apparently not among the Czar's big concerns, and if he has any misgivings about partnering with a company whose name in the US has become a byword for reactionism, they're not showing.
I don't know anything about the oil reserves on the northern Siberian shelf, but I'm guessing these would be some of the most difficult and dangerous places to site a drilling operation that the world has to offer.
But for Putin, who shows all the audacity that Obama lacks, the potential rewards outweigh the dangers, and he might even be looking for some payback aimed at the Saudis. Later on I'll tell you how it was Saudi Arabia, not Saint Ronald Reagan, who destroyed the Soviet Union.