The existing Russian oil and gas projects are supported by active reserves and are expected to maintain annual production of approximately 10-12 million tonnes of oil and 19-21 million tonnes of LNG for the foreseeable future. The new Arctic LNG-2 project has the capacity to provide an additional annual production of up to 20 million tonnes of LNG
This assertion was made by experts during the 10th International Scientific and Practical Conference The Far East and the Arctic: Sustainable Development, which was held on the 13th and 14th of March in Moscow. The crux of the expert meetings was to provide a balanced assessment of the current state of the oil and gas industry and to predict the development of hydrocarbon facilities in the context of severe sanctions, technological, geological and resource restrictions.
At the moment, four groups of oil and gas fields are being developed: the Pechora field, the Yamal, the Vostok Oil project, and the Vankor field. The oil and gas potential in the Western and Eastern part of the RussianArctic zone is significantly underestimated, and its industrial development is beyond the long-term horizon. Reserves can only be considered if they are profitable; anything that brings losses is just seen as resources. A similar situation is observed in the Western Arctic, where, despite extensive exploration, the focus remains on resources.
Russian experts identify four groups of factors limiting the development of Arctic hydrocarbon projects: sanctions, technology, geology and resources. By sanctions, they mean problems with the sale of finished products, both at operating facilities (Prirazlomnaya platform, Varandey terminal, Arctic Gate marine terminal, Yamal LNG plant) and at facilities in the study stage (Tambey field, GPN-Gydan field), under installation (Vostok-Oil project) and awaiting commissioning (Arctic LNG-2 plant). When the Prirazlomnaya platform, Varandey, Arctic Gate and Yamal LNG were under construction, tankers could deliver cargoes to Rotterdam within 10-12 days. The current situation is different. Technological risks are associated with ice pipelines, the presence of tankers, etc. Geological risks are associated with the transition from reserves to proven reserves of the Vostok-Oil, Tambey and GPN-Gydan fields. In addition, the size of the discovery of some fields remains unclear.
Russian experts have expressed skepticism regarding the timing of the commencement of profitable production in Russian Arctic fields and the export of finished products via the NSR. According to recent estimates, onshore fields that are on the state balance sheet, including the Tambey group, Center-Olginskoye and Yuzhno-Tigyanskoye, are not expected to be brought into production before 2045. Notably, both Center-Olginskoye and Yuzhno-Tigyanskoye were identified by Soviet geologists 75 years ago. The introduction of other shelf fields, primarily gas fields, including Pobeda, Severo-Obskoye, Shtokman, Dolginskoye, Murmanskoye and others, is expected to occur between 2040 and 2045. There are relatively realistic prospects for Gazprom's gas projects, including Leningradskoye, Dinkova, Kruzenshternskoye, Rusanovskoyeand Nyarmeyskoye. It is anticipated that these projects will enter profitable production by 2035.
Profitable production of hydrocarbons depends on maintaining tax preferences, solving geopolitical problems and lifting sanctions restrictions.
When classifying Arctic hydrocarbon fields and transport methods for raw materials, it is evident that the vast array of deposits in the Arctic region can be categorised into two groups: onshore deposits, which are exported via sea by tankers or by land via oil and gas pipelines, and offshore deposits.
Onshore deposits represent areas where historical oil and gas production has taken place since the 1960s, including Komi, NAO, Nadym-Pur-Taz, Yamal, Gydan, and Yakutia. All new deposits in industrial production are also located on land, including Varandey, Yamal LNG, Arctic LNG 2, Vostok Oil, and several other fields. The export of products is facilitated by the seaport of Sabetta, utilising reinforced tankers and with icebreaker escort in the conditions of the ice shelf, through the Varandey terminal in the open sea.In fact, there is only one field in industrial production on the shelf: the Prirazlomnoye platform.
The Russian oil industry is poised for resilience, though the strategic direction for its development in the Eastern Arctic remains a point of uncertainty. With the drilling of deep wells in the western sector of the Arctic, primarily in the Barents Sea and partially in the Kara Sea, the focus now shifts to the shelf area's potential exploration and exploitation.
There are no wells in the eastern part of the Arctic. The drilling of deep wells is only possible from floating offshore platforms, of which Russia does not have any,
experts noted at a panel discussion devoted to the development of the Russian oil and gas industry
In the western part of the Russian Arctic, a significant number of gas giants have been identified, though they are not involved in development. This includes the Zhukov, Rokossovsky, Pobeda, Severo-Obskoye, 75 Years of Pobedy fields and the primary "sleeping" giant, the Shtokman field in the Barents Sea. The Shtokman field is generally located on an ice-free shelf, making its development straightforward. However, these 400 million cubic metres are not subject to industrial production, so it would be premature to discuss the remaining trillions of tons in more distant and challenging ice conditions.
To summarize, we argue that that the optimism surrounding the Russian Arctic shelf's potential to resolve long-term hydrocarbon supply challenges may hinder the progress of the oil and gas industry and the nation's economy based on the natural resources. In order to convert "resources" into "reserves", it is first necessary to overcome technological backwardness, mitigate environmental risks, resolve issues of transport provision of cargo flow, tax management, and the presence of a favourable world market situation. In this regard, proposals and agreements with Asian partners can assist Russia in overcoming the challenges associated with developing the Northern Sea Route. These collaborations can address issues related to technological vulnerability and address the shortage of tankers and non-nuclear icebreakers.
Ekaterina Serova
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