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Russia Says Its Offshore Arctic Has Oil And Gas Reserves For Centuries

Russia will not run out of oil and gas anytime soon—its offshore Arctic resources alone could last for decades and even centuries, according to Russian Deputy Prime Minister Alexander Novak.

“The potential of the Arctic zone is huge. Speaking about offshore resources only, those are 15 bln tonnes of oil and around 100 trillion cubic meters of gas. That will suffice for decades, hundreds of years if they are required and it is economically reasonable,” Novak said on Thursday, as carried by Russian news agency TASS.

These resources, however, are very expensive to develop right now, the Russian official said, but noted that the government plans to encourage offshore Arctic development regardless.

“Those are rather expensive projects, which require provision, certain subsidies, including on taxes, return on investment. The government has provided such incentives for projects like that. Certain taxes have been slashed to zero for offshore projects,” Novak said.

Massive offshore Arctic development would take place only if it’s needed and only if other regions in Russia run out of resources, Novak added.

Arctic offshore project developments in Russia are under U.S. sanctions which ban provision of services or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects.

Earlier this year, Russian Natural Resources Minister Alexander Kozlov said that Russia’s oil reserves would last until 2080 at the current pace of annual production.

Russia also has natural gas reserves for another 103 years of annual production at current output levels, the minister said.

Russia’s actual oil and gas reserves could even rise if it steps up exploration in hard-to-drill areas, the minister added, noting that Russia needs to develop exploration, including in hard-to-reach areas.

In April this year, Evgeny Kiselev, the head of the Russian Federal Agency for Mineral Resources, told state outlet Rossiyskaya Gazeta that Russia had 58 years worth of oil reserves, of which 19 years to profitably pump those reserves at current levels with current technology. Advances in technology, however, will constantly push back the deadline. Asked how long Russia would have oil reserves, Kiselev said “indefinitely.”

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By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on September 03 2021 said:
    The fact that President Putin is going at full blast developing the huge oil and natural gas reserves in the Russian Arctic and pouring hundreds of billions of dollars into the region underlines three highly important realities.

    The first is an acceptance that oil and gas will continue to drive the global economy well into the future.

    The second reality is that Russia’s untapped and inexhaustible reserves of oil and gas estimated at 15-17 billion tons of crude oil (110-124.6 billion barrels) and 85-100 trillion cubic metres (3004-3534 trillion cubic feet) of gas could maintain Russia’s oil and gas supremacy for more than a century according to Russian Deputy Prime Minister Alexander Novak.

    The third reality is that it is most probable that the very last barrels of oil produced will come from Iraq, Venezuela and the Russian Arctic.

    Russia’s success is exemplified by LNG giant Novateck which plans to build out its LNG export capacity up to 70 mtpa by 2030. This, in turn, dovetails into Russia’s plans for LNG production of 80-140 mtpa by 2035, which would be greater than that of the world’s two largest producers Qatar and Australia. Moreover, it will be possible to deliver LNG into northeast Asian markets on a sustained basis for ‘a little over’ $3 per million British thermal units (MMBtu) via the North Arctic Route (NAR).

    By 2024, Russia intends to boost oil shipments on the NAR to 1.61 million barrels a day (mbd) and by 2030 to 3.0 mbd.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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