• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 4 hours China wields coronavirus to nationalize American-owned carmaker
  • 39 mins Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 10 hours Open letter from Politico about US-russian relations
  • 1 day US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
  • 3 days Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 11 mins COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 3 hours Trump Hands Putin Major Geopolitical Victory
  • 10 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 19 hours Trump is turning USA into a 3rd world dictatorship
  • 3 days China's impending economic meltdown
  • 2 days Liquid Air Battery
  • 2 days What the heroin industry can teach us about solar power (BBC)
  • 3 days The Truth about Chinese and Indian Engineering

Russia Puts Arctic Dreams On Hold

Russia will put its Arctic ambitions on hold.

The Russian Energy Ministry gave a presentation earlier this week that pointed to exploration in the Kara Sea not resuming until 2020 at the earliest, a huge blow to the highly touted project north of the Arctic Circle.

In 2014, Rosneft suspended drilling in the Kara Sea after western sanctions forced Rosneft’s partner, ExxonMobil, to withdraw from the project. But just before ExxonMobil pulled out, the companies made a potentially huge discovery at its Universitetskaya-1 well in the Kara Sea. The well was drilled just as the U.S. government was preparing harsh sanctions on Russia in response to its intervention in Ukraine. Just before the deadline for ExxonMobil to withdraw, the companies announced that the $700 million well could hold at least 750 million barrels of light oil, and 338 billion cubic meters of natural gas.

Related: For Canadian Oil Sands It’s Adapt Or Die

The results were preliminary and need follow up. Still, a few weeks before the discovery, Rosneft’s CEO Igor Sechin laid out plans to invest $400 billion in the Arctic over a period of 15 years.

Those plans are now in a state of limbo. Reports from earlier this year suggested that it would take at least another two years before Rosneft could get back to work and drill a second well. However, the energy ministry’s presentation from this week suggests that it could take much longer – the company probably won’t drill another well until the early part of next decade. Without the technology and capital offered by ExxonMobil, Rosneft will be unable to go it alone.

Related: Our Energy Problem Could Lead To A Major Debt Crisis

Western sanctions and the crash in oil prices will hamstring the ability of Russia’s oil companies to expand any further, at least for the next few years. Just like the rest of the global oil industry, Russia will have to retrench and focus on its most productive assets, while putting expensive frontier exploration plans on the shelf.

Nevertheless, Russia has gone much further than any other nation in exploring the Arctic for oil. Gazprom began production at an offshore oil field – the Prirazlomnaya – in the Pechora Sea in 2014. The field produced 2.2 million barrels last year, and the company expects to double output this year.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Lee James on September 21 2015 said:
    If true, this news about Russia' intentions is good news. The world will be better off if we do not go to places like the Arctic to extract oil and gas. Hopefully, all countries can work toward less oil dependency. We will be healthier and more secure with reduced need for burning oil, and reduced need to obtain it from conflict areas of the world.

Leave a comment

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