Russia Exxon Oil
Russia's Prime Minister Vladimir Putin (C) and Deputy Prime Minister Igor Sechin (L) look on during a signing ceremony in the Black Sea resort of Sochi August 30, 2011. Exxon and Russia's Rosneft signed a deal three years ago to develop oil and gas reserves in the Russian Arctic, opening up one of the last unconquered drilling frontiers to the global industry Reuters

Exxon Mobile won a contract to drill for oil in Russia's sector of the Arctic Ocean.

In a deal announced Tuesday, Exxon will partner with OAO Rosneft, Russia’s state-owned oil producer, replacing British Petroleum in exchange for unspecified assets. Exxon and Rosneft will spend $3.2 billion in the initial explorations of the Arctic and Black Sea, the companies stated.

Russian Prime Minister Vladimir Putin estimated that the companies' investments in the project could skyrocket to $500 billion.

“The scale of the investment is very large,” Mr. Putin said at the signing ceremony in Sochi. “Exxon Mobil is definitely one of the leading companies, including for operations in the challenging Arctic latitudes.”

“This large-scale partnership represents a significant strategic step by both companies,” Rex Tillerson, chairman and chief executive officer of Exxon Mobil stated. “This agreement takes our relationship to a new level and will create substantial value for both companies.”

The main focus of the highly sought-after contract is a body of water called the Kara Sea. It sits between the northern Siberia coast and the Novaya Zemlya archipelago. Receding ice floats have made the sea a valuable prospect for oil companies, according to the New York Times, because drilling and exploration are becoming increasingly feasible possibilities.

Drilling in the Arctic Sea is generally forbidden, including in the United States' portion of the sea. The two oil companies will start with four blocks of the territory known as the East Prinovozemelskiy License Blocks, which have a total area of 30 million acres.

According to a release, Rosneft has a two-thirds stake in the project, which Exxon controls the remaining third.