Rosneft, Russias state-controlled oil company and the largest oil producer in the country, plans to develop an Arctic cluster of oil fields over the next five years.
These plans by Rosneft—led by a close ally of Vladimir Putins, Igor Sechin—fit the Russian Presidents ambition to develop Arctic oil and gas resources and adjacent regions, as well as the so-called Northern Sea Route—a shipping lane through Russian Arctic waters stretching from Europe to the Far East.
Russias Arctic oil development has stalled in recent years due to the western sanctions that have had international majors, including ExxonMobil, pull out of some exploration projects in Russia.
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Now Rosneft is pledging increased efforts to fulfill Putins Arctic development ambitions, aiming to have first oil produced in the so-called Arctic cluster of fields by 2024 and to boost cargo traffic on the Northern Sea Route.
For Rosneft, the Northern Sea Route, if connected to inland oil fields in Russias north, could provide another export avenue for its oil, especially to the markets in Asia.
During a meeting between Putin and Sechin this week, Rosnefts boss told his boss that the oil giant is currently “considering the possibility to create an Arctic cluster that will fully focus on bringing the cargo traffic in the Northern Sea Route to 80 million tonnes by 2024, as planned,” as per the English translation of the meetings transcript provided by the Kremlin.
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The development may include Rosnefts Vankor cluster, Suzun, Tagul, the Lodochnoye deposit, and a number of geological exploratory projects in South Taymyr.
“For example, we have the Yermak project there we have launched jointly with BP, as well as the promising Zapadno-Erginsky area,” Sechin told Putin, noting that a second stage of development, if the resource potential is confirmed, could include reserves in East Taymyr in the Khatanga area.
According to Sechin, “major Western and Southeast Asian investors” have shown interest in the so-called Arctic cluster, which “will certainly create conditions for an accelerated resource deployment as well as for a comprehensive development of related industries.”
The development of the Arctic oil resources, however, requires an investment-friendly environment that will be crucial to launching such projects, as well as regulatory terms and taxation that wont change during the projects lifetime, be it 30 or 50 years, Sechin told Putin.
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Stable regulatory environment will help attract additional investors, especially from outside Russia, according to Rosnefts boss.
Another important point in Sechins report to the Russian President was that the Northern Sea Route needs to be economically viable if it were to achieve Putins ambition for developing the Arctic resources and regions.
“Given the availability of alternative logistical options, the Northern Sea Route should be as economically viable for the projects as alternative routes. In this regard, we formulate our proposals, submit them to the Government, and we will continue to do this work,” Sechin said.
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At the end of February this year, Russian business daily Kommersant reported, quoting Read More
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