Russia Needs Moratorium on Arctic Drilling Due to Low Oil Prices: WWF
The Unhived Mind
Posted on December 25, 2014 1 Comment
Russia Needs Moratorium on Arctic Drilling Due to Low Oil Prices: WWF © Flickr/ WWF-Canon Global Photo Network
22:21 23.12.2014(updated 00:09 24.12.2014)
http://sputniknews.com/russia/20141223/1016163955.html
MOSCOW, December 23 (Sputnik) — In light of global oil prices falling to a five-year low, Russia needs to declare a 10-year moratorium on fossil fuel production and exploration in the Arctic, the head of the World Wide Fund for Nature (WWF) Russia said Tuesday.
“We need to declare a 10-year moratorium on oil and gas exploration in the Arctic. At current oil prices, these projects are absolutely unprofitable,” Igor Chestin said at a press conference organized by the Russian Ministry of Natural Resources and Ecology.
Speaking on the state of environmental protection in Russia in 2013, Chestin noted that low oil prices give the Russian economy impetus to develop other sectors and reduce its dependency on natural resources.
Meanwhile, Russian Minister of Natural Resources and Environment Sergei Donskoi presented a different view on the issue.
“We believe that the Arctic projects enable us to develop the industry,” Donskoi said, citing the opening of the Pobeda (Victory) oil field in the Kara Sea in September as an example of the Arctic’s contribution to the Russian oil and gas industry.
The minister added that oil and gas production in the Arctic is not likely to reach large-scale volumes before 2020.
Russia is currently experiencing an economic downturn and a depreciation of the national currency amid a decline in oil prices, which constitutes a major part of the country’s revenues.
According to the Russian Emergencies Ministry, the total value of resources concentrated in Russia’s Arctic territories exceeds $30 trillion.
theunhivedmind
Notice how New Venice (Britain) and its vile pirate forks have been attacking the Nicaragua Interoceanic Canal which is a great project for progression and expansion of mankind. New Venice will always throw its vile genocidal green policy illusions against progressions for mankind. New Venice want to take us back to a Zeusian dark age but we the people need and demand a Promethean era from now on, we demand the use of the BRICS Development Bank. Now we see the same New Venice trickery being used against the massive top dog oil fields in the Arctic owned by Russia. I should remind you that the WWF is merely a front for some of the worst pirate slavemasters on the planet known as the 1001 Club headed by the Malthusian Prince Philip the husband of the New Doge of New Venice (Elizabeth Mary Windsor). The Worshipful Company of Fuellers will just have to face it that Russia is now the boss cocky of energy.
-= The Unhived Mind
PUTIN’S RUSSIA DISCOVERS A MASSIVE OIL FIELD IN THE ARCTIC LARGER THAN GULF OF MEXICO
Posted on September 28, 2014 Leave a Comment
Russia Discovers Massive Arctic Oil Field Which May Be Larger Than Gulf Of Mexico
Submitted by Tyler Durden on 09/27/2014 18:30 -0400
http://www.zerohedge.com/news/2014-09-27/russia-discovers-massive-arctic-oil-field-which-may-be-larger-gulf-mexico
In a dramatic stroke of luck for the Kremlin, this morning there is hardly a person in the world who is happier than Russian president Vladimir Putin because overnight state-run run OAO Rosneft announced it has discovered what may be a treasure trove of black oil, one which could boost Russia’s coffers by hundreds of billions if not more, when a vast pool of crude was discovered in the Kara Sea region of the Arctic Ocean, showing the region has the potential to become one of the world’s most important crude-producing areas, arguably bigger than the Gulf Of Mexico. The announcement was made by Igor Sechin, Rosneft’s chief executive officer, who spent two days sailing on a Russian research ship to the drilling rig where the find was unveiled today.
The oil production platform at the Sakhalin-I field in Russia,
partly owned by ONGC Videsh Ltd., Rosneft Oil Co., Exxon Mobil
Corp. and Japan’s Sakhalin Oil and Gas Development Co. on June 9, 2009.
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Well, one person who may have been as happy as Putin is the CEO of Exxon Mobil, since the well was discovered with the help of America’s biggest energy company (and second largest by market cap after AAPL). Then again, maybe not: as Bloomberg explains “the well was drilled before the Oct. 10 deadline Exxon was granted by the U.S. government under sanctions barring American companies from working in Russia’s Arctic offshore. Rosneft and Exxon won’t be able to do more drilling, putting the exploration and development of the area on hold despite the find announced today.”
Which means instead of generating billions in E&P revenue, XOM could end up with, well, nothing. And that would be quite a shock to the US company because the unveiled Arctic field may hold about 1 billion barrels of oil and similar geology nearby means the surrounding area may hold more than the U.S. part of the Gulf or Mexico, he said.
For a sense of how big the spoils are we go to another piece by Bloomberg, which tells us that “Universitetskaya, the geological structure being drilled, is the size of the city of Moscow and large enough to contain more than 9 billion barrels, a trove worth more than $900 billion at today’s prices.”
The only way to reach the prospect is a four-day voyage from Murmansk, the largest city north of the Arctic circle. Everything will have to shipped in — workers, supplies, equipment — for a few months of drilling, then evacuated before winter renders the sea icebound. Even in the short Arctic summer, a flotilla is needed to keep drifting ice from the rig.
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Sadly, said bonanza may be non-recourse to Exxon after Obama made it quite clear that all western companies will have to wind down operations in Russia or else feel the wrath of the DOJ against sanctions breakers. Which leaves XOM two options: ignore Obama’s orders (something which many have been doing of late), or throw in the towel on what may be the largest oil discovery in years.
And while the Exxon C-suite contemplates its choices, here is some more on today’s finding from Bloomberg:
“It exceeded our expectations,” Sechin said in an interview. This discovery is of “exceptional significance in showing the presence of hydrocarbons in the Arctic.”
The development of Arctic oil reserves, an undertaking that will cost hundreds of billions of dollars and take decades, is one of Putin’s grandest ambitions. As Russia’s existing fields in Siberia run dry, the country needs to develop new reserves as it vies with the U.S. to be the world’s largest oil and gas producer.
Output from the Kara Sea field could begin within five to seven years, Sechin said, adding the field discovered today would be named “Victory.”
Duh.
The Kara Sea well — the most expensive in Russian history — targeted a subsea structure named Universitetskaya and its success has been seen as pivotal to that strategy. The start of drilling, which reached a depth of more than 2,000 meters (6,500 feet), was marked with a ceremony involving Putin and Sechin.
The importance of Arctic drilling was one reason that offshore oil exploration was included in the most recent round of U.S. sanctions. Exxon and Rosneft have a venture to explore millions of acres of the Arctic Ocean.
But what’s worse for Exxon is that now that the hard work is done, Rosneft may not need its Western partner much longer:
“Once the well is plugged, there will be a lot of work to do in interpreting the results and this is probably something that Rosneft can do,” Julian Lee, an oil strategist at Bloomberg First Word in London, said before today’s announcement. “Both parties are probably hoping that by the time they are ready to start the next well the sanctions will have been lifted.”
And here is why there is nothing Exxon would like more than to put all the western sanctions against Moscow in the rearview mirror: “The stakes are high for Exxon, whose $408 billion market valuation makes it the world’s largest energy producer. Russia represents the second-biggest exploration prospect worldwide. The Irving, Texas-based company holds drilling rights across 11.4 million acres in Russia, only eclipsed by its 15.1 million U.S. acres.”
Proving just how major this finding is, and how it may have tipped the balance of power that much more in Russia’s favor is the emergence of paid experts, desperate to talk down the relevance of the Russian discovery:
More drilling and geological analysis will be needed before a reliable estimate can be tallied for the size of the oil resources in the Universitetskaya area and the Russian Arctic as a whole, said Frances Hudson, a global thematic strategist who helps manage $305 billion at Standard Life Investments Ltd. in Edinburgh. Sanctions forbidding U.S. and European cooperation with Russian entities mean that country’s nascent Arctic exploration will be stillborn because Rosneft and its state-controlled sister companies don’t know how to drill in cold offshore conditions alone, she said.
“Extrapolating from a small data sample is perhaps not going to give you the best information,” Hudson said in a telephone interview. “And because of sanctions, it looks like there’s going to be less exploration rather than more.” In addition, the expense and difficulty of operating in such a remote part of the world, where hazards include icebergs and sub-zero temperatures, mean that the developing discoveries may not be economic at today’s oil prices.
Maybe. Then again perhaps the experts’ time is better suited to estimating just how much longer the US shale miracle has left before the US is once again at the mercy of offshore sellers of crude.
In any event one country is sure to have a big smile on its face: China, since today’s finding simply means that as Russia has to ultimately sell the final product to someone, that someone will almost certainly be the Middle Kingdom, which if the “Holy Gas Grail” deal is any indication, will be done at whatever terms Beijing chooses.