Posted on 10/01/2014 5:21:38 AM PDT by thackney
Drilling in the Kara Sea will continue into next year, even if sanctions prevent US firm ExxonMobil from participating, Russia’s Deputy Energy Minister Kirill Molotsov said Monday.
According to Molotsov, Russia can independently go ahead with the necessary drilling in the Kara Sea in 2015 with the help of drilling platforms owned by Russian companies. Russia’s largest oil company, Rosneft has opened a large deposit of oil and gas in the area.
"In total, we have about eight units of 100 percent Russian-owned platforms,” the deputy energy minister said.
In the event Exxon leaves, work in the Arctic will continue, Rosneft CEO Igor Sechin has confirmed.
“Of course we’ll do it on our own and attract the necessary technologies and different partners who don’t have limitations on cooperation,” the Rosneft CEO said in an interview with Bloomberg News.
On September 12, the US banned Western companies such as BP, Shell, Exxon, and Total from working on Arctic, deep-sea, and shale oil projects in Russia in an attempt to punish Moscow for its perceived meddling in the Ukraine conflict.
At the same conference, Molotsov also said that the Russian government is prepared to financially support energy companies such as Rosneft that are feeling the squeeze of sanctions. Other energy companies sanctioned are Gazprom (but only by the US), Gazprom Neft, Lukoil, Transneft and Surgutneftegaz.
Rosneft and Exxon launched a new drilling well, Universitetskaya-1, in the Kara Sea on Saturday. However, Exxon will have to wind down operations before the October 10 deadline set by the US government. Exploration and development will have to be continued by Rosneft without Exxon, or be put on hold until sanctions are lifted.
Billion-barrel field On Saturday, Rosneft’s CEO Igor Sechin, along with Russian President Vladimir Putin, were present at the unveiling of the northernmost oil well in the world, which is estimated to have cost over $700 million. Oil output from the field may begin in the next five to seven years, Sechin said.
Though no exact estimates are available to date, experts believe it could hold up to 1 billion barrels of oil or crude equivalent, bigger than offshore reserves in the Gulf of Mexico, Alaska or Canada. There are also more than 300 billion cubic meters of recoverable gas reserves.
Recoverable oil is just important to Rosneft as to ExxonMobil, both of which are facing production shortages, and need to find new sources to replace old and depleted ones. Russia and the US are neck-and-neck in claiming to be the world’s biggest oil and gas producer, a title Russia currently claims but America is close to taking over.
The Kara Sea field will be named “Pobeda” or “Victory.”
“We will continue drilling here no matter what,” Sechin told Bloomberg News.
Both Rosneft and Sechin are targets of the US and EU sanctions against Russia.
Others have different opinions:
US Sanctions Against Russia Might Just Have Saved the Polar Bear
https://news.vice.com/article/us-sanctions-against-russia-might-just-have-saved-the-polar-bear
Without technical assistance from Western oil and gas companies, however, Rosneft may be unable to continue its offshore exploration in the Arctic, says Heather Conley, senior vice president for Europe, Eurasia, and the Arctic at the Center for Strategic and International Studies (CSIS).
Clearly ExxonMobil — according to its reading of the sanctions law — had to depart the field,” Conley told VICE News. “Time will tell if Russian companies can develop these resources without the technological expertise of Western companies and the backing of international finance.”
Russian companies, added Conley, lack offshore drilling expertise and rely on other producers like BP, Shell, and ExxonMobil for help in the technically challenging waters of the Arctic Ocean. Specialized equipment is needed to withstand the frigid conditions of the far north and rough conditions can test the abilities of even the most skilled drillers.
China might be able to offset the loss of international finance due to US and EU sanctions, explained Conley, but it won’t be able to replicate the West’s technological know-how.
Brilliant move. Because of the sanctions, Russia will drill in the Arctic Circle without any US companies being involved. (sarcasm)
So a whole bunch of well paid workers at Exonn are now out of work. Thanks EU and Obama...nice job!!
I suppose Russia could hire those folks from Exxon who lost their jobs.
The drill rig, West Alpha, http://www.rigzone.com/data/rig_detail.asp?rig_id=1140, is owned by North Atlantic Drilling.
The challanges with this location are not the water depth or the drilling depth, it is the cold and ice of the location.
The sea depth at the drilling site is 81 m, the depth of the straight well – 2,113 m. the well was drilled in open-water conditions – at the 74th circle of longitude, 250 km clear off the inland of the Russian Federation.
It may be a challenge....but it’s working!!
Don’t worry, Obama, the EPA as well as Captain Planet and the Planeteers will stop Putin from ruining the Artic Ocean before Global Warming melts all the ice off of it as the Alaskan Fishermen fish it to extinction. As for the Polar Bears that make it to shore, Sara Palin and her Big Game Militia will finish them off as soon as they shake off the sea water.
Drilling a test well in the summer months and keeping a production platform in place during winter ice are two different problems.
Vlad doesn’t have an EPA to stop him.
I noticed also that Exxon’s analysis of this well and field’s capacity was not as rosy as were the ruskis. SOP.
The field appears to hold more gas than oil, and Rosneft was vague about how many of its estimated 730m or so barrels of crude could be extracted.
Many Russian oil executives believe it will not come to that {new partner}, because they expect western sanctions to be relatively short lived.
http://www.ft.com/intl/cms/s/0/586ae5c0-487c-11e4-ad19-00144feab7de.html#axzz3EtSExVs4
“The challanges with this location are not the water depth or the drilling depth, it is the cold and ice of the location.”
No Worries! Soon, all the coldness and ice will dissipate, as all the computer models indicate. /s
Brings back memories of the Moscow Olympic and Soviet Union pipeline sanctions. We have over the years traveled on Interstate 74 past Peoria, Illinois. About that time, the structural iron for what appeared to be the largest single floor building I have ever seen was put up. Nothing more happened and no one seemed to know what it was. Later we found out that it was owned by Caterpillar and was to be the factory to provide the machinery to build the Soviet gas pipeline. The sanctions put an end to that and:
“The practical effect of the pipeline sanctions in this country was to bar the Caterpillar Tractor Company, Dresser Industries and other major American companies from selling equipment for the construction of the pipeline.
The ban on sales has contributed to severe problems at Caterpillar, the manufacturer of earth-moving machinery. The company is expected to lose money this year and has laid off thousands of workers, although the recession, a strike and other factors have also contributed to its problems.” ( http://www.nytimes.com/1982/11/10/world/us-allied-accord-on-soviet-pipeline-described-as-near.html )
The iron stood and rusted for many years until Caterpillar eventually took it down and used it to make engines. The Soviets built the pipeline and paid someone else for the machinery.
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