Sanctions, Oil Slump Delay Russian Offshore Drilling 2-3 Years

(Bloomberg) -- Russia’s state-run energy giants Rosneft OJSC and Gazprom PJSC are delaying some offshore drilling by two to three years because of sanctions and weaker oil prices, according to the country’s Ministry of Natural Resources.

The nation will drill two offshore wells in 2017, down from an original plan for 14, Denis Khramov, deputy minister, said Tuesday at a conference in Russia’s Far East. The delay means 28 wells will be drilled in 2019 instead of 19, he said

U.S. and European Union sanctions prompted by Russia’s role in the Ukraine crisis have cut access to offshore-drilling technology and equipment, Khramov said.

Russia’s efforts to tap its offshore resources, which are estimated at 14 billion to 15 billion metric tons of oil equivalent, are lagging other countries, Khramov said. Russia drilled 11 subsea wells last year, compared with 57 in Norway, he said.

The ministry this year approved drilling delays in eight offshore licenses held by Rosneft and five by Gazprom, according to Khramov. Brent crude, the benchmark for more than half the world’s oil, has fallen more than 50 percent in the last 12 months and hit a six-year low in August.

To contact the reporter on this story: Elena Mazneva in Yuzhno at emazneva@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net Ovais Subhani.