MOSCOW: Gazprom has announced that it is on track to begin oil production this year at the Prirazlomnoye Arctic oil project that has ignited protests from environmental groups over the dangers of possible oil spills.
“As was envisaged, production is expected to start by the year-end,” Gazprom Neft Shelf, a unit of Gazprom, said — the first public remarks by the company since Greenpeace activists tried to scale the production platform at Russia’s first Arctic offshore oil project last month.
Arctic offshore oil and gas development is crucial for Russia, which relies on hydrocarbon sales for more than half its budget revenue. The Ministry of Natural Resources puts the offshore oil resources at 100 billion tonnes, which would be enough to satisfy global demand for 25 years at current consumption levels.
State-controlled Rosneft, Russia’s top oil producer, has agreements with ExxonMobil, Eni and Statoil to tap the Arctic deposits. But those project are unlikely to eke out any oil and gas before the 2020s.
Gazprom has cited “technical reasons” for several delays to the start of production at Prirazlomnoye, which is designed to produce heavy, sour oil.
Media reports have estimated total investment in the field, discovered towards the end of the Soviet Union, at between $4bn and $5bn.
Reuters
