Russia's Oil Industry on Course for Arctic Reserves – Rosneft–BP Deal Clears the Way

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To meet the challenge, the Russian National Oil Companies (NOC) have partnered with foreign firms in a move liberalizing the country’s laws on offshore oil and gas exploration. In addition, a proposal made to Parliament last October would, if passed, abolish export duties on offshore oil projects for between five and 15 years. There are also plans to lower other related taxes, such as the mineral extraction tax.

Major Deals with International Oil & Gas Partners Underway

Russia’s NOC Rosneft has already entered into major deals with International Oil Companies (IOC). In May of this year it entered into agreements with Statoil and Lukoil, and in April announced plans to partner up with Italian multinational, Eni, to develop exploration licenses in the Black Sea and the Barents Sea.

Rosneft has also made deals with India’s NOC, ONGC Videsh Ltd, and China’s China National Petroleum Corporation, CNOOC, and Sinopec to begin exploration in Russia’s hydrocarbon rich Arctic region. Only recently, unconfirmed media reports indicate that the company plans to acquire TNK–BP, an Anglo–Russian oil joint–venture. This deal could make Rosneft the global number one oil producer, industry experts say.Although oil production has reached historic levels, the gradual shift in the fuel mix affects the global energy bill: New and alternative energies as well as unconventional natural gas (shale gas) drive the transition away from oil and coal. Russia, currently the number two in crude oil production (output: 10280 thousand barrels daily) flexes its muscles for attacking its long–time rival Saudi Arabia. More in our Top Ten Oil Producing Countries.

* *Depleting Reserves in Major Oil and Gas Producing Fields Prompting Russia to Expedite Exploration Activities in its Arctic Region in Alliance with Foreign Firms

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