Russia's "Bakken" play
Forbes reports this week on The Bazhenov, an oil shale play in Western Siberia, that is 80 times bigger than the Williston Basin’s Bakken. While conventional oil has long been profitable, The Bazhenov is undeveloped as yet, needing more technology and expertise to tap the tight oil. Read the Forbes article on The Bazhenov potential here.
A deal was made over the weekend between Norway’s oil giant Statoil and Russia’s own oil giant Rosneft, to bring exploration with proven, Western technology to Siberia. The deal is similar to one made between ExxonMobil and Rosneft – the Kremlin will require Rosneft to buy stakes in Statoil ventures in Norway and beyond, a technique known as “hostage-taking,” to give the Norwegian company more security in potential Russian oil discoveries. This “hostage” technique is used to force honest business practices, especially in light of Russia’s previous decade of major disruption and dismantling of oil companies and their assets. (This is a great read – see more details on the Rosneft-Statoil deal in this Forbes article). Where Statoil will allow Rosneft’s stakes has yet to be seen, but the Norwegian company holds assets in the Barents Sea, Texas, the Gulf of Mexico, Brazil, Tanzania and North Dakota.