Russia to Offer 22 Blocks in Arctic Shelf Region

Russia is planning to offer 22 oil and gas leases on the Arctic shelf between 2002 and 2005. It is estimated that the Barents Sea holds approximately 16.1 billion barrels of oil equivalent. Russia is claiming this area could be another Prudhoe Bay. By comparison, Alaska's Prudhoe Bay initial proven reserves stood at 8.6 billion barrels and have since been upgraded to 13 billion.

Russia, the world's second largest oil exporter, produces the bulk of its crude in Western Siberia but as this area is being depleted, officials say the country needs to tap new reserves such as Eastern Siberia and the Arctic shelf.

The ministry said the area which it is offering would cover 70,600 square km or approximately one percent of Russia's offshore territory, with the first three tenders to take place this year. The ministry did not say whether foreign companies were allowed to bid but added it expected to collect more that $700 million for state coffers by 2005.