Rosneft is to develop over a billion tons of Black Sea oil using $1 billion of ExxonMobil funds in a deal struck just days after an Arctic tie-up with Britain's BP.
Deputy Prime Minister Igor Sechin, who is also the chairman of Russia's top oil company, signed the deal along with Rex Tillerson, chief executive of ExxonMobil, at the World Economic Forum in Davos on Thursday.
It marked a reversal of fortunes in Russia for ExxonMobil, which in recent years had clashed with Russian authorities over the budget for its Pacific Sakhalin-1 project.
Rosneft officials with Tillerson in Davos said Exxon would invest $1 billion, and the deep-sea venture would be split 50/50 at the exploration stage then 66/33 in favor of Rosneft at the development stage.
Sechin said the deal was a proof that the investment climate in Russia had improved.
"We have managed to convince even Exxon of that," Sechin said.
The deal is the second tie up with a major western oil company this year. It follows a shares swap and drilling deal in the Arctic between Rosneft and Britain's BP, another Western major with a rocky history of investment in Russia.
Analysts hailed the BP deal as a sign Russia is moving away from "resource nationalism" as it faces rising investment requirements to stay the world's top oil producer, pumping at current record rates of more than 10 million barrels per day.
BP and Rosneft agreed to work on three projects in the Kara Sea, as well as carry out a share swap which will make Russia a shareholder in BP.