IRVING, Texas (AP) — Exxon Mobil Corp. said Friday it will provide technological expertise and work with Russian oil company Rosneft to produce oil from tight formations in western Siberia.
Exxon said it will finance geological studies and exploratory drilling and get a one-third interest in a potential development phase of the project, with Rosneft getting two-thirds.
The companies also said they agreed to establish a research center for Arctic offshore operations.
Exxon Mobil said the agreements were signed at a ceremony attended by Russian President Vladimir Putin, Exxon CEO Rex Tillerson and Rosneft President Igor Sechin.
Rosneft officials said in April that the area of the joint development could hold 13 billion barrels of oil. They said the best way to extract the oil from tight underground rock formations would be with horizontal drilling and hydraulic fracturing, a technique that Exxon and others use to produce natural gas in the U.S.
In a statement Friday, Tillerson said the agreement combined Exxon Mobil's strength in technology used to produce oil trapped in tight formations and Rosneft's knowledge of western Siberia's geology.
Shares of Irving-based Exxon Mobil rose $1.09 to close at $83.22.