Exxon in exploration deal with Russia's Rosneft

Exxon signs exploration deal with Russian oil company Rosneft ahead of losing 'largest' crown

Associated Press

NEW YORK (AP) -- Exxon Mobil Corp. has signed a deal with Russia's state-owned oil company Rosneft to look for oil in Western Siberia.

It is part of a long-term strategic agreement between the two companies signed in August of last year. The timing is also key for Exxon, which is set to be overtaken as the world's largest publicly traded oil company in terms of production when Rosneft closes on its deal to buy TNK-BP, Russia's third-largest oil producer later this month. The work will span 10,000 square kilometers, or nearly 4,000 miles.

Rosneft will provide staff and access to existing infrastructure. Exxon, based in Irving, Texas, said Thursday that it will provide financing of up to $300 million for the pilot program, as well as necessary technology, specialists and management services for drilling complex horizontal wells.

Drilling will begin in 2013. The companies expect commercial development in 2015.

Exxon Mobil shares rose 2 cents to $88.02 in Friday morning trading.