Oil & Gas/Russia Russia's Oil Industry on Course for Arctic Reserves – Rosneft–BP Deal Clears the Way
Russia, major supplier of oil and natural gas for Europe, is about to enter new territories. While domestic reserves in major are depleting, oil and gas companies eye for the untouched Arctic – now, that Rosneft is about to take over its former competitor TNK–BP, this plans could soon be excecuted...
The race for Arctic has begun: According to a new report* by Global Data, Russia will undertake an expensive and challenging venture into its Arctic region amidst declining production from several of its major oil and gas fields.
Russia’s oil field production has been in decline over the last few years, and as the Arctic has hydrocarbon reserves that could last the country well over a century, a mission north has been deemed a necessary undertaking, the analysts believe.
Russia's Oil and Gas Reserves are Depleting
Surgutneftegas, one of the largest oil fields in Russia, produced around 472 Million barrels of oil equivalent (MMboe) in 2006, but this fell by about 8% by 2011, with a total of 433 MMboe. Equally, the Urals Federal District produced 18,509,040 Million cubic feet (MMcf) of gas in 2006, with this figure falling by 6% to approximately 17,362,550 MMcf in 2011.
From the 142 oil fields and 35 gas fields in operation in Russia, hydrocarbon production levels dropped from 7,641.53 MMboe in 2006 to around 7,200.23 MMboe in 2009. Since 2010, the country has been compensating by employing advanced oil recovery technologies.
Government Issues Mission to Go North
While speaking at the sixth media forum of the United Russia Party in September 2011, Russian Natural Resources Minister, Iury Trutnev, claimed that hydrocarbon resources in Russia’s Arctic shelf could last 100 to 150 years. Yet, to capitalize on these massive reserves, oil and gas firms will have to brave hazardous conditions and freezing temperatures in what is certain to be a highly expensive project.
Rosneft–BP Deal Clears the Way for Arctic Oil Production
State owned oil giant Rosneft expects vast potentials up North: One fifth of the global oil reserves could be hidden beneath the polar waters, experts estimate. Previously, the company had to work together with its competitor TNK–BP, an Anglo–Russian joint venture. But now, as Rosnefts plans to take over BP's shares in the JV, this obstacle could soon be cleared ... More on page 2!