Rosneft, ExxonMobil to Continue Development of Arctic despite Sanctions

Rosneft and ExxonMobil will complete implementation of the first stage of the project for the development of the Russian Arctic shelf, after which both companies will be forced to suspend their operations due to sanctions imposed on Russia, representatives of both companies recently said.

According to Sergei Donskoy, Russia’s Minister of Natural Resources, the companies plan to complete the first stage of drilling operations in the Arctic, by Oct. 10.

As part of the project, Karmorneftegaz, the joint venture of the companies, continues drilling the Universitetskay-1 oil field in the Kara Sea.

According to Zeljko Runje, Rosneft’s vice president for offshore projects, the partners plan to complete work, which will allow them to evaluate the volume of reserves in the area. The companies hope that they will be able to estimate the reserves on the C2 category by the end of the current year.

Overall, according to the partners’ plans, drilling of the Universitskaya structure will help discover a new petroleum province in the Russian Arctic shelf with volume reserves of more than 35 billion barrels of oil equivalent, however implementation of these plans will probably be suspended.

ExxonMobil announced Sept. 20 that the U.S. government provided permission to the company and its contractors to complete operations on Universitetskay-1 without specification of timing. Meanwhile, the companies will not be able to continue implementation of the project by at least the beginning of next year. According to their initial plans, the next stage of the project involves drilling the second exploration well in the Kara Sea, which should take place based on drilling results from the first one.

If sanctions lasts for a long time, Rosneft might be forced to start a search for a new partner, however this may take up to 2 years. According to some sources in the Russian Ministry of Energy, among these partners could be Statoil and Shell, which prefer Russian projects to similar projects in Alaska and Norway. An interest to the Russian Arctic has also been expressed by other companies.


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