By Victoria Stilwell Exxon Mobil Corp. (XOM) agreed to develop tight oil reserves in Western Siberia and open a research center with Russian oil and gas company Rosneft (ROSN.RS) as part of an effort to find new regions of operation and explore the potential of difficult-to-produce reserves. Exxon Mobil and Rosneft agreed to expand efforts to develop oil reserves in tight, low-permeability formations in Western Siberia using technology advancements that Exxon Mobil has successfully deployed in North America. The pact includes provisions for a pilot program to determine the technical feasibility of developing the reserves and is an extension of the research program the two companies signed in April. The companies also plan to approve a work program for selected Rosneft license blocks that will include geological studies of and drilling in the Bazhenov and Achimov reservoirs. Exxon Mobil, the world's largest publicly traded oil company by market value, will finance the geological studies and exploratory drilling, which is expected to begin in 2013. The two companies also agreed to establish a joint Arctic Research Center for Offshore Developments. The center will provide services to support all stages of oil and gas development on the Arctic shelf, including the design of ice resistant offshore vessels, structures and Arctic pipelines. Both initiatives are a part of a long-term strategic cooperation agreement the two companies signed in August. Exxon Mobil reported its first-quarter earnings fell 11% on reduced production and sales volumes, as well as higher operating expenses at its exploration and production business. The company, which has bet heavily on natural-gas production in recent years, was expected to see profit drop because prices for the commodity had hit decade-low levels. The company's oil production fell 7.7%, largely due to the effect of production-sharing contracts. Exxon's production decrease shows that some major U.S. oil companies continue to struggle to increase their output as the reserves in their fields deplete and access to new sources remains a challenge. Shares of Exxon Mobil rose 0.2% to $82.32 in recent premarket trading. The stock is down 3% so far this year. Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
