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Is Kuwait’s $500 Billion Oil Plan Overoptimistic?

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Kuwaiti Oil Minister Khaled al-Fadhel…

Rosneft Strikes First Oil In Eastern Arctic

Arctic

Russia’s Rosneft announced its first crude oil finds 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.

According to the company’s press release on the find, the license plot where it struck oil spans almost 17,218 sq km at depths of up to 32 meters. Since 2014, when exploration work started in the Laptev Sea, Rosneft has identified 114 prospective oil and gas-bearing locations, with preliminary reserve estimates pegging their total at some 9.5 billion barrels of oil equivalent, or 69.635 billion barrels.

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 its press release. At the moment, however, there is only one producing platform in the country’s Arctic shelf, in the Pechora Sea.

Related: Big Oil Opposes Trump’s Budget Plans

Operated by Gazprom Neft, the Prirazlomnaya platform started pumping oil back in late 2013, and at the end of November 2015, total output since inception hit 1 million tons, or 7.33 million barrels. 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.

At the moment, the bulk of Russian crude oil production is concentrated in Western Siberia, but fields there are beginning to be depleted and they also carry a heavier tax burden for energy companies. With oil prices much lower than they used to be just three years ago, Russian oil and gas companies have received an additional push to expand their exploration activities to north and east, despite the harsh weather of the Arctic.

By Irina Slav for Oilprice.com

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