Russia To Fund Arctic Oil, Economy Development With $2.75B

Russia will be financing the development of the Artic continental shelf and the economy of the local areas with more than US$2.75 billion (160 billion rubles) by 2025, Russia’s Prime Minister Dmitry Medvedev said at a cabinet meeting on Thursday.  

Russia’s program for Arctic development rests on three pillars—boosting economic growth, developing sea infrastructure, and developing the continental shelf with modern technology and equipment, Medvedev said.

Neither sanctions nor low oil prices are deterring Russia’s ambitions to develop oil and gas reserves in its part of the Artic.  

The U.S. Treasury sanctions list from 2014 prohibits the exports of goods, services (not including financial services), or technology in support of exploration or production for Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil. 

Earlier this year, Russia’s biggest oil producer, Rosneft, announced its first crude oil find in the Eastern Arctic, in the Laptev Sea. The company did not detail any reserve estimates for the well—its first offshore well in the eastern Arctic—but noted that its 28 licenses in the Russian Arctic shelf have combined reserves estimated at 34 billion tons of oil equivalent, or 249.22 billion barrels.

Related: Texas Shale Hit Hard By Hurricane Harvey

Since 2012, Rosneft has invested US$1.72 billion (100 billion rubles) in Arctic exploration. Between this year and 2021, it plans to spend another US$4.29 billion (250 billion rubles) on exploration and development in the Arctic.

By 2050, the Arctic could supply between 20 and 30 percent of Russia’s total crude oil output, according to experts that Rosneft cited in June. At the moment, however, there is only one producing platform in the country’s Arctic shelf, in the Pechora Sea. Operated by Gazprom Neft, the Prirazlomnaya platform started pumping oil back in late 2013. The field is estimated to hold 70 million tons, or 513 million barrels, with annual production averaging 5.5 million tons (40.3 million barrels) at full capacity.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Will This Bring Big Oil Back To The Bakken?
• Russian Energy Unaffected By U.S. Sanctions
• Are Libyan Oil Production Gains History?