Russia Ships First Oil from Arctic Platform

By The Maritime Executive 04-19-2014 05:46:00

President Vladimir Putin hailed Russia's first shipment of Arctic offshore oil on Friday, saying the platform decried by environmentalists will help Moscow expand its global energy markets share.

Gazprom Neft, the oil arm of Russia's top gas producer Gazprom, shipped the first 70,000 tonnes of oil by tanker from the Prirazlomnoye platform, the site of a protest by 30 Greenpeace activists who were arrested last year.

The launch of oil production in the Arctic, seen by Russia as one of the key sources in the gradual replacement of output from its depleted West Siberian fields, has long been delayed due to cost overruns and technical difficulties.

"This, in essence, is the beginning of great and large-scale extraction of minerals and oil by our country in the Arctic," Putin said, speaking from his residence outside Moscow via a video link with workers at the platform, including Gazprom's head Alexei Miller.

"The whole project will positively influence Russia's future presence on the global energy markets and will strengthen both the whole economy and the energy sector," said Putin, who personally oversees all the major energy projects in country.

Russia's oil output stands at over 10 million barrels per day, the world's largest, but it needs new sources of crude oil, including hard-to-recover deposits and the Arctic, to sustain this level.

ARCTIC RESOURCES

The start of Arctic oil shipments drew strong criticism from the environmental group Greenpeace, whose protests against Prirazlomnoye last year led to the arrest of 30 activists who were held for two months before a Kremlin amnesty released them.

"If we do not stop this Arctic oil rush, we risk not only the environment but our ability to shake off the power structures of the last century," Greenpeace International Executive Director Kumi Naidoo said in a statement.

"Greenpeace, alongside millions of our supporters, will continue to stand against any oil company that tries to drill in the melting Arctic ocean.

The arrest of activists from 18 countries, who faced up to 15 years in jail on piracy charges, drew criticism from Western nations and celebrities such as ex-Beatle Paul McCartney.

The recoverable oil reserves of the Prirazlomnoye field, located 60 kilometres (37.5 miles) off Russia's northernmost shores, are estimated at 72 million tonnes.

Gazprom Neft said on Thursday that the expected level of the output is seen at 6 million tonnes a year (120,000 barrels per day) from after 2020.

Rosneft, Russia's top oil producer, has agreed to develop Russian Arctic hydrocarbon resources with ExxonMobil , Eni and Statoil.

It puts total offshore hydrocarbon resources at 43 billion tonnes of oil equivalent.

The Arctic is estimated to contain 20 percent of the world's undiscovered hydrocarbon resources. Rosneft's projects are not expected to produce their first oil from Arctic waters before the middle of the next decade.

Copyright Reuters 2014.