Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Rosneft Teams Up With Mobil And Texaco on Sakhlin 3 Field

Rosneft said it has joined Mobil Corp. and Texaco Inc. in developing an oil field in Russia's Far East and is close to an agreement with Exxon Corp. on another field in the region.

Rosneft, together with its subsidiary Sakhalinmorneftegas, received a 33.3 percent share in the Sakhalin 3 oil field according to the agreement it signed with Mobil and Texaco on Wednesday, said Ivan Chernov, head of offshore fields development at Rosneft.

It plans to sign an agreement with Exxon to receive 33.3 percent share in a neighboring field later this year, he said.

"Our Western partners need us because we have infrastructure, equipment and workers in the Sakhalin islands,'' Chernov said. "Our participation in the project will also help to get the parliament's approval to develop the field under a production-sharing agreement.''

Such agreements allow companies to give the Russian government part of any resources extracted in lieu of taxes. Western companies often prefer production sharing to the country's complex and often contradictory tax regulations. To develop a field under such an agreement, a company first must acquire permission from the parliament.

Sakhalin 3, off the eastern coast of Sakhalin, has an estimated 650 million tons, or 4.7 billion barrels, of oil in reserves, of which about 40 percent is recoverable.

Rosneft and its partners won't begin developing Sakhalin 3 until the parliament permits production sharing for the oil field, Chernov said.

Rosneft has said it believed that participation in Sakhalin projects would help the government attract buyers for the sale of a 75 percent stake in the company, scheduled for October.

The Russian government hopes to raise $1.6 billion by selling off Rosneft at an auction by October. Two previous attempts this summer to privatize the oil giant failed when the state was unable to come up with any bidders.