1/2/2024 0 Comments Project vostokVankor, where Rosneft is partnered with a group of Indian investors, has been in operation for a decade. It will also include the huge Vankor field group, which belongs to Rosneft. Vostok Oil’s principal asset will be the undeveloped Paiyakhskoye field, controlled by NGH and estimated to contain up to 8.8 billion barrels of recoverable oil. There are several major oil and gas projects already up and running within the Russian Arctic Circle, but the plan is to start adding to the inventory. Vostok Oil is a joint venture between state-owned oil major Rosneft and Russian owned private oil producer Neftegazholding (NGH), which is run by a former Rosneft executive, Eduard Khudainatov. No one is really sure as only half of the Arctic basins have been explored, but given the geology of the region, experts are confident they contain very large deposits indeed. Other estimates say that the Arctic deposits could double Russia’s oil reserves. That means the Arctic could increase Russia’s reserves of known oil deposits by another half from the 29.7 billion tonnes of oil it has now. That is where Vostok Oil comes in as the vehicle to bring what are believed to be massive Arctic oil resources online.Įstimates of the reserves under the Arctic ice and snow are necessarily vague, but thought to be in the order of 90 billion barrels of oil, or 12.3 million tonnes, as well as 47 trillion cubic metres of gas in 19 geological basins. The decline in oil production would cost the budget some 3.3 trillion rubles a year ($46.2 billion) in taxes and another 1.3 trillion rubles in foregone investment - or approximately 20% of its revenue, as well as hurting the already weak investment case. Current reserves stood at 29.7 billion tonnes of oil as of early 2017, he estimated. We will reach a peak of 570 million tonnes in 2021,” Novak said in September, Interfax reported.Īlmost half of current capacity could be lost in less than two decades as existing fields pass maturity, Novak said, with levels expected to drop to 310 million tonnes by 2035. “We expect about 553 million tonnes of oil production in 2018. The need to develop Russia’s Arctic oil is becoming pressing as Energy Minister Alexander Novak warned in September Russia is only three years away from peak oil production. Russian oil and gas producers have to develop increasingly remote and challenging fields to keep their output stable as some of the biggest oil fields reach maturity or are already in decline.Ī recent survey by the country’s licensing agency Rosnedra found that a third of Russia’s 2,700 large oil fields are unprofitable to develop and a separate study forecast Russia’s oil production will go into decline in the coming decades if new resources such as those in the Arctic are not opened up and developed. Already the Kremlin has started to throw significant resources at the company as Russia’s existing oil fields reach peak production. There is a new kid on Russia’s oil producing block: Vostok Oil, a joint venture set up to explore and exploit the oil resources of the Arctic.
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