In Sakhalin… Exxon has fared much better than rival Royal Dutch Shell, which has led the development of Sakhalin-2. In 2005 Shell disclosed $10 billion in cost overruns on the $20 billion project, and in 2007 it was forced by the Kremlin to sell half of its Sakhalin stake to Gazprom. Though Shell and Rosneft signed a strategic alliance in 2007, it has proven to be all show, no go. In May, Rosneft and Shell were reportedly in talks over a deal to explore the Arctic. The Exxon announcement indicates that those talks have ended.
Christopher Helman, Forbes Staff
From Houston 8/31/2011 @ 12:46PM
More than a black eye for BP, the Rosneft deal is a gold star for ExxonMobil, one that illustrates that the company is not only the worlds biggest international supermajor, but the only one that can claim any lasting success in Russia.
Contrary to the conventional wisdom that Exxon is stepping into dance shoes that had been knocked off BPs feet the Exxon/Rosneft venture has been a long time in coming. Whats more, the lovey-dovey deal increases the likelihood that Exxon and the Kremlin might soon be able to come to terms on the development of massive untapped natural gas reserves held by Exxons Sakhalin Island development.