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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.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.