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Has The Big Oil Fire Sale Started?

Has The Big Oil Fire Sale Started?

The world’s largest sovereign wealth…

Gazprom Neft Expands Arctic Oil Field Output

Gazprom Arctic Oil

Gazprom Neft said today it had launched production from two new wells at its Arctic oil field Prirazlomnoye, bringing the total to six.

Prirazlomnoye is the first Russian Arctic oil project, and this year, output is seen at 2.6 million tons of crude, or 19.06 million barrels, despite a three-month technical maintenance shutdown of the same-name platform during the summer. To compare, last year the Prirazlomnaya platform pumped 2.1 million tons of oil, or 15.4 million barrels.

The summer maintenance work will be carried out mainly by U.S. companies, according to Gazprom Neft head Alexander Dyukov. This sounds interesting in light of U.S. sanctions against Russia, which, among other things, prohibit “the provision, exportation, or re-exportation of goods, services (not including financial services), or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation.”

Although Dyukov did not name any of the companies that will take part in the maintenance work, the statement raises the question if oilfield service providers have found a way around the sanctions that would restrict their access to Russia’s oil industry and the industry’s access to technology and services.

Related: Canada’s Oil Industry Goes On The Offensive

Production at Prirazlomnoye started at the end of 2013, and first oil, and the new blend, ARCO, from Arctic Oil, reached markets the following year. Since then, more than 10 million barrels have been shipped from the field.

Recoverable reserves at Prirazlomnoye are estimated at 540 million barrels of crude, and the peak of production is set to be reached in 2020, at 110,000 barrels per day. The Arctic as a whole is top priority for Gazprom Neft: last year, two new projects got the go-ahead there. Messoyakha, which is the northernmost onshore oil field in Russia to date, is estimated to hold 470 million tons of oil and condensate. Novoportovskoye, or Novy Port, field holds an estimated 250 million tons of oil and condensate.

By Irina Slav for Oilprice.com

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