• 1 hour Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 3 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 7 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
Russia Goes All In On Arctic Oil Development

Russia Goes All In On Arctic Oil Development

Fighting sanctions and low oil…

Moscow Must Look Elsewhere As Western Oil Companies Quit Russian Projects

Moscow Must Look Elsewhere As Western Oil Companies Quit Russian Projects

As sanctions force Western companies to abandon joint projects in Russia, the country’s energy minister says it’s time for Moscow to replace them with partners that are allowed to follow through with joint ventures.

“If companies in the long-term perspective decide not to participate in the investment projects, we will attract investors from those countries that have not imposed sanctions targeting our oil and gas companies,” Alexander Novak said Nov. 22 at a student energy forum in Moscow.

Already, the US oil company ExxonMobil, France’s Total and the Anglo-Dutch Royal Dutch Shell have withdrawn from joint ventures with Russian oil companies in the Arctic and Siberia. The Western energy giants cited the US and European Union sanctions imposed over Russia’s suspected role in the fighting in Ukraine.

Related: Russia In Weak Position For New Gas Deal With China

Novak said such withdrawals point to a kind of uncertainty for Russia’s energy sector, because the Western companies joined in the projects willingly and ended their work only because of the sanctions. The measures deprive Russian oil projects of oil technology and equipment as well as Western financing for energy initiatives.

“On the one hand [Western] companies would like to continue their work [in Russia], on the other hand, their regulators do not allow them to do so,” he told the forum. “This uncertainty should be overcome.”

Novak added, “If [Western] companies decide for themselves not to take part in organizing investment projects in the long term, we will invite investors from countries which have not imposed sanctions against us and our oil and gas companies.”

As part of this effort, Alexei Ulyukayev, Russia’s economic development minister, said Nov. 8 that three of his country's largest energy companies, Rosneft, Lukoil and Gazprom, may list their stock shares in Asian currencies on the Hong Kong Stock exchange to encourage financial support from the East.

Related: APEC 2014: Russia Tries To Leave Europe Behind

Some Western energy companies are still working in Russia. Rosneft, for example, is working with Norway’s state-owned Statoil in the Sea of Okhotsk off eastern Russia and in the Barents Sea off western Russia. They’ve also begun projects for heavy oil in the region of Samara in Western Russia. And Gazprom is working with Shell in the Priobskoye and Palyanovskaya fields in western Siberia.

Nevertheless, the Western sanctions have hit Russia hard. It is the world’s largest exporter of oil and natural gas, and relies on this income for about half of Moscow’s budget. One way to protect the budget would be to reduce oil production in an effort to boost prices. Novak said Nov. 21 that a production cut was being considered, but there’s been no final decision.

But reducing production would be difficult if not harmful to Russia’s oil sector, in large part because the climate in most of the country’s oil fields is so cold that stopping production at some wells would freeze them up. And Russia can’t keep harvesting oil, then storing it to keep it off the market, because it has very little storage capacity.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Bob Johnson on December 01 2014 said:
    The debate on who gave Washington the right to decide on what is white and what is black and wrong strategies giving rise to ISIl and claims that we destroyed Afganistan Iraq and Libya are CANARDS.
    We were attacked by Afganistan, Ukrain, and Georgia - countries of the former soviet union never attacked Russia.

    Iraq with Saddam had a pufferfish strategy giving clues that they had chemical weapons of mass destruction through the moving around of 40 foot tankers that were supposedly carrying chemical weapons. It was a ploy, but we did not know it.
    After 911 we had to take him seriously. It was a mistake. It was an error. He did not have these weapons. At one point would he pursue them, yes. But that is one day. Not when we invaded. It was a mistake. But it was based on fears from signals of tankers he moved around and intelligence that was in error.
    Russia has done, and is doing, everything it can to destabilize and take over Ukrain like it did Georgia. And everyone in the world can see that and knows it. It is as clear as black and white.
    It doesn't take god to decide what is black and white.
    Don't worry, you will have a chance to decide what is black and white.
    You will get a first hand chance to decide if your economy is white, black or grey in the coming years thanks to your faithful leader.
  • Alex on November 29 2014 said:
    Dear Matthew, would you say it is good to meet the rules of the "open" U.S.?

    For sure we would not see any American soldier in Iraq if this country produces not oil but cucumber and potato!
    What's about Kosovo?! There was Washington behind Kosovo precedent!
  • Alex on November 29 2014 said:
    Come on! What kind of assertions are you talking?! Do you know how many
    military bases does Pentagon have outside U.S.? Do you know haw many bases does Russia hav outside Russia?! Who did destroy Iraq, Libya, Afghanistan? Who did
    bomb Belgrad? Was it Russia? No! It was Washington!..
    So it has smthg to do not to God but Devil!
  • matthew wan on November 28 2014 said:
    Childish rhetoric aside, somebody has to decide what is white and what is black. For the well-being of the World, better if such decisions are made by government of open societies. Russia depraved itself of such qualification.
  • Alfred Neuman on November 28 2014 said:
    "So, I repeat my question: Who did give to Americans the rights to decide what is white and what is black? Are they God?"

    If one were to buy into your assertions, the answer is yes, they are God.
  • Alex on November 25 2014 said:
    The international sanctions against Russia are backed
    bu U.S. Joe Biden has told to media U.S. had to press heavily the European countries to join these sanctions...

    I wonder Who did give to Washington the rights to decide what is bad and what is good. Look, U.S. army
    destroyed Afghanistan, Iraq, Lybia. Thanks to wrong American strategy we witness dramatic destabilisation of the ME and born ISIL.

    I think it would be much more clever to unite the countries to impose sanctions agains U.S.: they invent they own rules and ask all countries to meet them. Remember Kosovo: there was not referendum there to separate from Serbia, but Washington pressed European countries to recognize Kosovo precedent. There was referendum in Krimea, 95% of its population woted for the reunification with Russia. Washington did not like this and we see the sanctions against Russia.

    So, I repeat my question: Who did give to Americans the rights to decide what is white and what is black?
    Are they God?

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News