The National Post is Canada’s second largest national paper.
Another superpower, Russia, has bought a piece of Canada’s oil patch, making Alberta the meeting point for all the world’s top power brokers and the focus of a new oil age based on technological advancements.
Russia’s largest oil firm, Rosneft, purchased a stake in the hot Cardium tight oil play as part of a landmark alliance with Exxon Mobil Corp. announced Monday.
The Russian giant joins China’s top oil companies, the top U.S. oil companies and the top European oil companies in establishing a Canadian presence. All are producing or learning to produce oil and gas from technologically challenging unconventional plays — from tight oil, to shale gas, to the oil sands.
Under the deal, RN Cardium Oil Inc., a Rosneft subsidiary, is acquiring 30% of Exxon Mobil’s stake in the Harmattan acreage. Exxon Mobil holds 56,000 acres in the play, which is operated by its Canadian affiliate, Imperial Oil Ltd. Rosneft subsidiaries also gained 30% stakes in ExxonMobil projects in West Texas and the U.S. Gulf of Mexico. In Russia, the two companies will work together on offshore projects in the Russian Arctic and Black Sea regions.
Like deals involving Chinese companies on properties in Western Canada, the American/Russian pact will involve transferring know-how to develop Rosneft’s own vast reserves of tight oil trapped in non-porous rocks like shale at three of its biggest fields in Western Siberia.
“Generally speaking, all the North American assets that Rosneft has farmed in on … are designed to help them develop technologies for use in unconventional reservoirs in Russia,” said Exxon Mobil spokesman Alan Jeffers.
“Western Siberia has a long-running conventional oil production area where they want to use unconventional resource development to capture what technically was not producible economically, similar to areas in North America where conventional production is depleting. Because of the innovation of hydraulic fracturing with directional drilling, which has transformed the North American landscape, they want to get expertise in that area,” Mr. Jeffers said.
Andrew Potter, an oil and gas analyst at CIBC World Markets, said Rosneft’s entry, which seems to be encouraged by new tax treatment for Russian companies investing abroad, could lead to more deals from Russia suitors. “There already seems to be a lot of interest from Asians for all things Canada so this could create more competition for strategic assets.”
For the rest of this column, please go to the National Post website: http://business.financialpost.com/2012/04/16/russians-follow-chinese-into-canadas-oil-patch/?__lsa=bf2638a3