Rosneft Won't Be Partaking in a Major Alaskan Oil Deal

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Russia's oil company, Rosneft, has passed on an opportunity to purchase a large portion of the Point Thomas Natural Gas Field in Alaska. The news was revealed at time of intense diplomatic tension between the U.S. and Russia, which has become the target of European and American economic sanctions.

The news came directly from Exxon Mobil. Rosneft was offered a portion of this lucrative gas field on Alaska's North Slope, in 2013, as part of their Arctic deal with Exxon. Exxon and Rosneft are currently in a $900 billion exploration deal in the Arctic. Exxon has already spent $600 million, three times the norm, setting up for this drill in Russia's Arctic Kara Sea. The companies hope to produce 9 billion barrels of oil. 

Kimberly Jordan, a spokesperson for Exxon Mobil, said, "Rosneft had evaluated the opportunity, and elected not to participate." According to Jordan, Rosneft's decision to pass on the option was made by April of this year. 

Later that month, Rosneft's president Igor Sechin was added to the list of individuals being sanctioned by the U.S. While the company itself is not sanctioned (even though it is a state controlled entity), increased sanctions aimed at Russia have affected their finances. The most recent round of sanctions has limited their ability to make financial transactions, as well as prevented U.S.-based companies from issuing new, long-term financing agreements with Rosneft. 

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Rosneft may also have been concerned with the state approval required for the deal to progress. In Alaska, the Department of Natural Resources must approve any company before they can control an Alaska lease. The Department's Commissioner, Joe Balash, has said Alaska would have looked "particularly closely at Rosneft because of its role not just as an investor, but also a potential competitor." 

Balash told the Alaska Dispatch News, "Were they going to get a veto card? Were they going to have the ability to hold our project hostage to advance their own projects in other parts of the Pacific? Anything like that would have been a concern."

Nonetheless, Balash still hopes foreign investors will be involved in Alaska's gas fields. 

This article is from the archive of our partner The Wire.