Russian Resources Ministry Urging Arctic Exploration
The head of Russian Resources Ministry, Rinat Murzin, is urging the government to approve the Arctic shelf exploration program. The minister said that Statoil, Norsk Hydro, Total, Gazprom and Yukos have reviewed the tender documents and are ready to take part in the tender process. "The only thing we are lacking so as to proceed with the plan is the government's final approval," Murzin said.
Last year, the ministry said it planned to tender 22 oil and gas blocks on the country's Arctic shelf between 2002 and 2005, saying they could contain oil riches as great as those in Alaska's Prudhoe Bay. The government postponed final approval to await the completion of Russia's global energy strategy in mid-2003. "We would really like to hold tenders before October because after this deadline major oil firms will close their financial books for 2004 and we could lose another year," Murzin said.
The ministry wants to tender the rights to explore and develop oil and gas blocks in the Barents Sea containing 2.2 billion tons (16.1 billion barrels) of oil equivalent. The ministry did not say how it classified the reserves. Russia's classification differs significantly from Western standards, which usually makes official estimates of possible recoverable reserves unreliable. By comparison, Prudhoe Bay's initial proven reserves stood at 8.6 billion barrels and have since been upgraded to 13 billion.
The ministry wants the first three tenders for blocks, containing some 800 million tons (5.9 billion barrels) of oil equivalent, to take place this year. The whole tendered area would cover 70,600 square km or around one percent of Russia's offshore territory, the ministry expects to collect some $700 million for the budget by 2005.
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