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January 31, 2011 4:01 PM

Rosneft Taps Freshfields for $1 Billion Exxon Mobil Agreement

Posted by Brian Baxter

A week after agreeing to form a $16 billion joint venture with BP to explore for oil in the Arctic, Russian energy giant Rosneft used the occasion of the World Economic Forum in Davos, Switzerland, to sign a $1 billion agreement with Exxon Mobil to probe the Black Sea for black gold.

As in the BP transaction, the government-owned Rosneft turned to Magic Circle firm Freshfields Bruckhaus Deringer for outside counsel on the joint development agreement with Exxon Mobil, under which the parties will work together to develop deepwater oil and gas resources in areas like the Tuapse Trough

Frank Miller, a corporate partner in Freshfields's London office, is advising Rosneft on the Exxon Mobil agreement, along with senior associates Sergei Diyachenko and Alexey Tokovinin in Moscow. Rosneft's in-house vice president for legal support is Larisa Kalanda, who also serves as deputy chair of the company's management board.

The deal with Exxon Mobil comes at a time when Rosneft's BP agreement is being challenged. BP already owns 50 percent of Russia's third-largest oil producer, TNK-BP, and shareholders in that enterprise are objecting to the Rosneft tie-up. The dispute is headed for arbitration in the U.K.

Skadden, Arps, Slate, Meagher & Flom and London's Brick Court Chambers are representing the Russian half of the TNK-BP joint venture in that matter, according to U.K. publication Legal Week. BP is being represented by Linklaters, which also advised the British oil giant on its own joint venture with Rosneft. (The New York Times' magazine recently reported on new methods being used by international energy companies to reach previously inaccessible pockets of oil.)

A spokesman for Exxon Mobil told The Am Law Daily in an e-mail that he did not have information on outside counsel for the Dallas-based company on its deal with Rosneft. Alan Jeffers said the agreement was only recently announced, and that Exxon Mobil expects to work out the final details later in the year. Reuters reports that the oil accord calls for a 50-50 ownership split at the exploration stage and 66-33 exchange in favor of Rosneft at the development stage.

Exxon Mobil's top in-house lawyer, general counsel S. Jack Balagia, Jr., ascended to the position early last year upon the retirement of his predecessor, Charles Matthews, Jr.

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