Russia has abandoned plans intensive oil and gas production on the shelf

The Arctic research ekspedicija

Less oil with shelf

Rosnedra have agreed on “Rosneft” and “Gazprom” the postponement of the exploration and start of production on 31-m site on the continental shelf of Arctic, far Eastern and southern seas, is spoken in materials of the Ministry (a copy is in RBC). At the request of “Rosneft” plans adjusted for exploration on 19 sites another 12 — for the needs of “Gazprom” and it “daughters” “Gazprom oil”. We are talking about transfer of terms and volumes of the seismic survey, on average, two to five years, the timing of drilling of wells in an average of three years on each occasion.

The most significant transfer of input in the development of the largest fields — two areas of the Shtokman field Gazprom will be put into operation not earlier than 2025 is planned before 2016. And Dolginskoye field Gazprom Neft’s reserves of 200 million tonnes of oil equivalent — 2019 to the year 2031. The largest number of sites where the revised plans of the companies are located in the Pechora sea (nine stations), eight in the Barents sea, seven in the Okhotsk sea, four in the Kara sea, two in Black and one in Eastern Siberia. For the rest of the fields in the timing of the start of production and does not specify: it would be determined on the basis of completion of exploration.

The official representative the Ministry of environment confirmed to RBC that the Agency, at the request of the companies actualized the license on the 31st precinct. “Changes are made when it is documented. First of all we are talking about the changes in the economic and geological conditions of the project, including minor changes in terms of drilling,” said RBC head of the press service of the Ministry of natural resources Nikolay Gudkov. The company has exceeded the obligations of seismic surveys on the shelf, he says.

The representative of “Gazprom oil” told RBC that the postponement of the start of production at the Dolginskoye field is due to the necessity of additional geological study, as it was discovered that the gas flow, as well as economic reasons. Representatives “Rosneft” and “Gazprom” have not responded to requests to RBC.

By 2035, oil production on the Arctic shelf will be 31-35 million tons, said Deputy energy Minister Kirill Molodtsov at the conference “Arctic-2016” in February. Earlier in the draft energy Strategy the speech was about achieving that deadline 35-36 million tonnes in the Arctic, and in General on the shelf, or 50 million tons per year. Moreover, by 2035, offshore must produce at least 10% of the total gas in the country (total production in the country will be 821-885 billion cubic meters) are noted in the document. In 2015 on the Russian shelf of the company produced 18.8 million tonnes of oil, 16 million tons of them — on the shelf of the Okhotsk sea, mainly on projects “Sakhalin-1” and “Sakhalin-2”. And on the Arctic shelf was produced only 800 thousand tons from Prirazlomnoye field (owned by “Gazprom oil”).

Due to the transfer of the timing of development of offshore fields the production in the Arctic by 2030, amount to only 13 million tonnes, which is by 27.8% less than the planned volume (18 million), estimated head of the laboratory “Shelf”, Deputy Director of the Institute of oil and gas problems of the RAS Vasiliy Bogoyavlenskiy. As a result, the oil production on the Russian Arctic shelf in the next 10-15 years will not be able to offset the decline of production from existing fields on land, he said RBC.

INCISION. The shelf “Rosneft” and “Gazprom”

According to the law on subsoil, licenses for shelf operations are issued only to state-owned companies with relevant experience, namely “Gazprom” and “Rosneft”. “Gazprom”, according to the corporate magazine, has 33 licenses for subsoil use of the Russian continental shelf, four licenses of its subsidiary company “Gazprom Neft as an operator. In “Rosneft”, according to the company, 55 licenses on the shelf. THE END OF INCISION

“A distant prospect”

“By the end of 2025 in the Barents sea Gazprom needs to fulfill the 20 thousand running km of 2D seismic and 9 thousand sq. km 3D and drill 12 exploratory wells, — stated in the article from corporate journal “Gazprom” (RBC has a copy). — The specialists of “Gazprom” believe that to master such volumes not only almost impossible, but also impractical. Obviously, drilling in areas in the Barents sea, based on current market conditions, is a fairly distant prospect”. The fact is that since the summer of 2014 the Brent crude oil prices fell four times (in January 2016 have reached the minimum of $27 per barrel) and has not recovered — now oil is trading around $52 per barrel.

However, last year “Gazprom” completely turned the exploration on the shelf, but strongly reduced its pace, especially in terms of drilling, it follows from the corporate magazine. At the request of “Gazprom” in 2015, seismic surveys were conducted only 6.7 thousand km, although over the last few years has been studied 34 thousand km in total. The increase in proven reserves of hydrocarbons the results of exploration on land and sea, according to Gazprom, in 2015 reached 582 million tons of conditional fuel by the plan of 536 million tonnes.

“Rosneft” while mastering the shelf more intensely, but bore wells only where it works in conjunction with foreign partners. This summer the company plans to drill two wells on the field, “Magadan-1 in the Okhotsk sea, together with Statoil. But drilling in Kara sea, Universitetskaya-1 has been postponed indefinitely as partner of state-owned companies Exxon may not participate in the project because of the sanctions.

By 2025 more than likely will begin producing oil in those offshore fields of “Rosneft”, where the company works with Western or Asian partners: Tuapsinskom the trough and the Western black sea area (Exxon and Eni), the Magadan-1 (Statoil), “University” (Exxon), Medyn-Varandey site in the Barents sea (CNPC) and North-Veninsky Deposit in the Okhotsk sea (Sinopec). From partners depends on the financing, access to technology. Some of the projects frozen because of the sanctions.”, — says the interlocutor of RBC in “Rosneft”.

The most expensive and laborious part of the work offshore is the drilling of wells. The average cost of drilling of one well on the Arctic shelf the Dean of geological faculty of the Russian state University of oil and gas. Gubkin Sergey Lobusev estimated at $200-500 million For example, the cost of drilling wells “University-1” “Rosneft” in the Kara sea for the discovery of “Victory” of more than $700 million But in order to drill at least one well to another and to contract a drilling rig. And U.S. sanctions and the EU ban to provide Russia with the technology and service on drilling at depths more than 130 m.

According to Alexei Belogoriev, Deputy Director of energy Institute for energy and Finance, in the energy Strategy until 2035 and the Scheme for development of the oil industry of the Russian Federation until 2035 previous plans for oil and gas offshore will be revised to the downside. According to the expert, earlier than 2025 to expect the beginning of production of oil and gas for new offshore fields makes no sense. “It is economically unprofitable with oil prices below $90 per barrel. In addition, for drilling in the Arctic, there is no relevant technology, but to the Western access was difficult because of the sanctions”. — he considers. According to the expert, to replace the shortfall of oil production volumes on the shelf can be replaced by a more intensive exploration on land and increase the recovery factor.

“Now because of low prices for oil and gas offshore fields has slowed worldwide. Company freeze work on the shelf. For us, this opportunistic delay plays into the hands of. We podustali with the deployment of our shipbuilding cluster in the far East” — quoted by TASS statement by Vice Prime Minister Dmitry Rogozin at the meeting of the Arctic to the Commission in early June.