Russia eyes Arctic for oil & gas
State-backed Rosneft has already entered into agreements with Norway’s Statoil and Russia’s second largest oil company, Lukoil, and in April announced plans to partner up with Italian multinational, Eni, to develop exploration licenses in the Black Sea and the Barents Sea. Rosneft has also made deals with India state-backed oil company, ONGC Videsh, China National Petroleum Corporation, CNOOC [China National Offshore Oil Corporation], and Sinopec to begin exploration in Russia’s hydrocarbon rich Arctic region.
According to GlobalData’s report, Russia’s oil field production has been in decline over the last few years, and as the Arctic has hydrocarbon reserves that could last the country well over a century, a mission north has been deemed a necessary undertaking.
Surgutneftegas, one of the largest oil fields in Russia, saw production fall by about 8 per cent since 2006 to 433 mmboe in 2011. Equally, the Urals Federal District produced over 18.5 trillion cubic feet (tcf) of gas in 2006, with this figure falling to some 17.4tcf in 2011. From the 142 oil fields and 35 gas fields in operation in Russia, hydrocarbon production levels dropped from 7,641 mmboe in 2006 to around 7,200 mmboe in 2009. Since 2010, the country has been compensating by employing advanced oil recovery technologies.
“To meet the challenge, the Russian National Oil Companies (NOCs) have partnered with foreign firms in a move liberalising the country’s laws on offshore oil and gas exploration,” said GlobalData, adding that a proposal made to the Russian Parliament last October would, if passed, abolish export duties on offshore oil projects for between five and 15 years.
There are also plans to lower other related taxes, such as the mineral extraction tax.
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