Only recently the Arctic
shelf has been known as the main hope of the global oil industry - the raw materials’
prices were climbing up, and the traditional deposits were decreasing. The
situation changed after the oil prices slumped, making the players delay for
long their ambitious plans for development of the Arctic. Anyway, experts do
not doubt the sector’s future is still in that severe place, and now businesses
are waiting for the prices to hit at least 75 dollars a barrel - this waiting
time would be quite good for preparing new technologies, Says a news item of Russian
News Agency TASS in Moscow.D ALSO
Deputy Director of the
Academy of Sciences’ Institute of oil and gas problems, Academician Vasiliy
Bogoyavlensky gives an optimistic forecast for oil production on the Arctic’s
shelf by 2030 - it cannot be more than 13 million tonnes a year, he said.
And still, the Arctic’s
severe conditions do not frighten off the oil producing countries, since
strategic interests of the "Arctic" nations - Russia, Norway, the
U.S., Canada and Denmark - are not expecting immediate profits. They have
long-term plans for implementation of investment programs for decades ahead.
"The Arctic shelf, despite the temporary slowed projects caused by the oil
price situation, still remains a strategic development direction,"
Russia’s Minister of Natural Resources Sergei Donskoi said.
"Like most experts,
I am sure the unique deposits, playing key roles in the global balance of
reserves, are bound to be opened exactly there."
Challenges and
objectives of the Arctic development will be on agenda of the Arctic: Territory
of Dialogue international forum in Arkhangelsk in late March. Experts say,
active discussions of the Arctic development may give an additional impetus to
it.
In Russia, the right to
develop the shelf is given to state-run companies with at least 5-year experience
of working at marine fields. Only Gazprom, Rosneft and Gazprom Neft meet this
requirement. Lukoil also develops some parts of the Russian shelf - the company
had received this right before the legal requirement became tougher. On the
Arctic shelf, only Gazprom Neft develops hydrocarbons at the Prirazlomnoye
field in the Pechora Sea.
The academician says in
waters of the Russian Arctic may be implemented many projects, which can be
cost effective even with the current oil prices. "In short term, many
projects in the transit zone may be implemented," he told TASS. "For example,
in the Pechora Sea - the Varandey and the Medynskoye fields (of Rosneft) are
ready for development, and production may start there in five-six years, as
well as Gazprom’s some projects - like in the Gulf of Ob, Kamennomysskoye Sea
and others. Those projects may be cost effective even in case of not high
prices on hydrocarbons. Development of the Prirazlomnoye field is cost
effective now already."
Finam’s Analyst Alexei
Kalachev said oil development of the Arctic shelf is not quite timely now and
with development of technologies the production’s cost would go down, like it
has happened with shale oil. "Technologies are developing, and only
recently shale oil used to be most expensive in production, but now it is much
cheaper, thus as technologies continue developing, the cost of oil production
on the shelf will become cheaper. But for development of technologies, we need
international cooperation, which is limited now," the analyst said.
Experts say development
of the Arctic’s shelf is affected not only by the lack of technologies, but
also by factors of price and climate conditions. There are many natural
problems related to the ice conditions, for example, some water areas may open
from ice for only two months during a year - if at all. In conditions of the
kind, the scientist said, only nine fields are developed on the Alaska shelf,
but they all are developed off artificial islands, that is in shallow waters,
and not a country has projects in the Arctic deep waters. "All projects in
deep waters are projects of the mid-term future - 2035-2045 in case conditions
allow," the academician said. "Projects in deep waters, like those in
the Chukchi Sea, the East Siberian Sea, will be cost efficient only if the oil
price is above 100 dollars a barrel, thus in near future the project are
important mostly from the scientific point of view - in studies of the Arctic
shelf."
The analyst says the
high price of oil production on the Arctic shelf comes first of all from the
complicated conditions, the lack of infrastructures and pipelines.
"Production on the shelf may be cost effective if the oil price is around
$75 a barrel, not less," he told TASS.R
A representative of
Rosneft, which owns 28 areas on the Arctic shelf, told TASS the company plans
for the current year prospecting drilling in the Eastern Arctic, saying now the
company consider a priority its preparations for drilling in the Arctic and
development of necessary technologies. "One of the priority tasks for the
company is a complex of geological exploration on the shelf of the Arctic seas
to prepare and develop technologies for fields’ development on the Arctic shelf
by the moment the oil price goes up and the oil production begins," the
company said.
Rosneft says the
company’s licensed obligations referring to seismic exploration have been
completed ahead of schedule at some areas: in 2016, the company made twice more
than licensed 2D and 3D seismic explorations. Thus, the work covered the area
of 0.8 million square kilometers of the Russian Arctic shelf. The company
promises to continue the work and to increase by a few times within coming five
years its investments in the Arctic development.
However, in prospecting
and exploring drilling the companies are way behind their obligations.
"The companies have already requested the Ministry of Natural Resources to
review the drilling terms, as now they are facing certain problems, including
the sanctions and limited opportunities in borrowing foreign drilling
equipment, as well as low hydrocarbon prices," the academician said.
"Thus, for example, development of the Dolginkoye field (Gazprom Neft) is
delayed to 2031, and due dates for some other fields are also postponed."
Earlier, the ministry
has approved to Rosneft and Gazprom delays of geological exploration and
beginning of production for more than 30 areas on the Arctic shelf, in the Far
Eastern and southern seas.
Later on, the Russian
government introduced a temporary moratorium on licensing new areas on the
Russian continental shelf. Head of the federal authority on use of subsoil
resources, Rosnedra, Evgeny Kiselev said the ban may be lifted as oil prices go
up to $100-105 a barrel.
"As for drilling,
during the recent six years, on the Arctic shelf were drilled only three wells,
one of them - in 2011 and the other two - in 2014. Thus, not a single well in
recent two years," the academician said. "This contradicts with the
licensed obligations the main companies had undertaken. According to those
obligations, to 2020 they were to be drilling about 12 wells a year, including
in the previous years. As of today, even theoretically it is impossible to
observe those licensed obligations."
( NOTE : THIS IS NEWS ITEM ISSUED BY TASS NEWS AGENCY AND IT HAS BEEN POSTED ON THE BLOG TO CREATE AWARENESS ON ARTIC FRONT )
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