In late September 2014, ExxonMobil and Rosneft — Russia’s largest state-owned oil company — announced the find of a huge oil and gas reserve in the Kara Sea between Russia and the Arctic. So large in fact, International Business Times says, “deposits are estimated to be worth $900 billion and comparable in size to Saudi Arabia’s vast onshore deposits.” The operation was headed by the Arctic Research and Design Center for Offshore Developments, an organization created jointly by ExxonMobil and Rosneft to handle the logistical steps for specialized ice-platform drilling, adherence to environmental regulations and further research on yields for Arctic exploration.
Apart from throwing another wrench into the peak oil argument, the claim is a sign that controversial Arctic exploration and drilling could be immensely profitable.
In the wake of immense possible gain, the two energy titans’ hands have been tied by politics and conflict. ExxonMobil was forced to abandon a $700 billion exploration project — of which they own 33 percent — due to the escalating tension amid the U.S. and Russian administrations. As a result, the Exxon-led project has come to a standstill, depriving Russia of possible buffer against its rapidly shrinking oil and gas fields. Is if this weren’t enough of a damper on public-private relations, ExxonMobil’s CEO, Rex Tillerson, returned to Russia to personally address the future of the wells and the company’s grievances against the Russian government, which include over-taxing Exxon during its discovery and drilling operations.
Rosneft had hoped to continue exploration activities and begin expanding into other sectors of the Arctic Ocean, as the potential to find reserves of unprecedented scale still remains very high. Sadly, it is becoming more and more apparent that for years to come, American participation and the profitability of these ventures, will remain largely dependent on Washington and Moscow’s relationship.