24 November 2011, 14:41

Russian oil projects and international cooperation in the Arctic

Russian oil projects and international cooperation in the Arctic

One fifth of the territory of the Russian Federation is located in the Arctic which is hiding 100s of millions of tons of oil and gas. With 85% of its shelf in the Northern Seas Russia’s Arctic will lead the way in oil and gas exploration in the future.

One fifth of the territory of the Russian Federation is located in the Arctic which is hiding 100s of millions of tons of oil and gas. With 85% of its shelf in the Northern Seas Russia’s Arctic will lead the way in oil and gas exploration in the future.

One of the most promising regions for oil exploration is the western area of the Pechora Sea with five fields. The three largest are the Prirazlomnoye Oil Field, the Medyn-Varandei Field and the Dolgin field.

The first, the Prirazlomnoye Field, was discovered in 1989. It is located on the Pechora shelf, 60 km from land with oil reserves estimated at up to 70 million tons. Annual oil production of up to 6,600,000 tons is forecast with the first oil expected to be produced by January 2012.

Russia is also exploring the Peschanoozersk Condensate Field situated on the westernmost point of the Kolguyev Island. It was explored and mapped out 1987 and currently 50 wells are in operation producing at least 100,000 tons a year. The field’s crude oil is transported to various production and processing sites via a pipeline and in the summer and autumn tankers with an average capacity of 30,000 tons also help to transport the oil to the continent. The tankers are loaded through a special floating pipeline.

Today at least 15 fields in the Barents, Pechora and Kara Seas have been discovered and are being prepared for exploitation which has led to a new phase of Arctic cooperation by Russia with foreign partners.

Such partnerships will bring more investments, develop new techniques and allow for the sharing of marketing and other risks. One important agreement was signed in late August when Russia’s Rosneft agreed on strategic Arctic cooperation with the US Exxon-Mobil.

According to the Head of the Russian Energy Development Fund, Sergei Pikin, America obtained access to three fields in the Kara Sea which are of great interest to the energy giant. He said the Arctic shelf will be the most important area in the next decade so the road or its exploration and development should be paved right now. Various experts he claims, say that the shelf contains up to 1/3 of the world’s unexplored reserves and that those who are initially present in the region will have an advantage when it comes to further exploration in future decades.

Foreign experience will help to reach the Arctic treasures which is testified by  Rosneft shareholders who were impressed by Exxon’s techniques, the fact that it has 50 years of shelf experience and its Canadian platforms which are iceberg resistant. Such technology is crucial for Russia in areas such as the Kara Sea where reserves are said to be approximately 5 billion tons of oil and 10 trillion cubic meters of gas.

The companies plan to exchange knowledge, techniques and staff and set up a joint Arctic Center for Shelf Exploration near St.Petersburg Russia. Exxon has also promised its partners shares in production projects in North America.

Russia’s Prime Minister Vladimir Putin, who is actively involved, has assessed the investments into the Arctic Center Project and the joint venture at 500 billion dollars, which will mainly go to infrastructure, including ice proof platforms.

During the first stage Exxon is to contribute 3.2 billion dollars and 2 billion more towards geological exploration with the first joint well expected to be drilled in 2015.

Arctic exploration is obviously a challenge as is underlined by the Kara Sea Projects where waters are from 40 to 360 meters deep in the East-Prinovozemelsky fields where Exxon is to explore. The ice cover does not thaw for 270-300 days a year and winter temperatures reach minus 46C.

Regardless of the hardships humanity has no other choice but to solve the tasks and overcome the difficulties associated with Arctic oil field development. New techniques and deeper cooperation between the world’s oil and gas leaders will be required.

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