Exxon and Rosneft joint projects de-facto were shut down in 2014: expert

ExxonMobil and Rosneft joint projects in fact were shut down in 2014, senior analyst of the National Fund for Energy Security Igor Yushkov has said to EADaily.

On March 1, it become known that since 2018 the American ExxonMobil will start to leave the joint projects on oilfields exploration with Rosneft under US anti-Russian sanctions, which will cause the American company losses worth $200 million.

According to Igor Yushkov, the ExxonMobil’s exiting the joint projects "was only a fixation of the situation, established by nowadays." The expert recalled that back in 2014 the United States imposed sanctions against shale projects in Russia, as well as jobs in the tough oil production. "These were the Rosneft projects that Exxon was involved in," he says. "So far the joint projects have been preserved on paper, but in reality they did not work. It is worth mentioning, had the sanctions not been imposed, the projects on the Arctic shelf would hardly work because of oil prices collapse.

Yushkov believes that the projects would not have been cost-effective even at $100 per barrel (on March 1, 2018, Brent is about $64, and the average price of the barrel in 2014 before the collapse of price was $100 - EADaily). "The hope was that the prices would go up and the technologies be improved, and in some eight years by the start of mining the project would be cost-effective," Yushkov said. "So, actually Rosneft and ExxonMobil projects were shut down in 2014, not in 2018."