Russia Monitor is a review of the most important events related to Russian internal and external security, as well as its foreign policies.
Date: 21 July 2022 Author: Grzegorz Kuczyński
Rosneft’s Sechin Brags About Arctic Oil Discovery
Russian energy major Rosneft claims to have discovered an 82-million-ton oil field in the Pechora Sea in the Arctic. While many oil analysts speculate that Russia lacks the needed technology to develop offshore Arctic fields, Rosneft boss Igor Sechin assures the country can boost output. The CEO of Rosneft says sanctions are illegal and Western countries will be hit more with a Russian oil embargo.
The company reportedly controls a total of 28 offshore licenses in the Arctic, eight of them in the Pechora Sea. The Pechora Sea is, in effect, a southeastern extension of the Barents Sea that sees the inflow of the Pechora River. Rosneft discovered the field thanks to a drilling campaign in the Medynsko-Varandeysky area. The company noted that the oil is light, low sulfur, and has low viscosity. Rosneft described the findings as proving the “significant oil potential of the region.” The Pechora Sea is in the eastern Barents Sea, waters that normally are ice-covered mid-winter and early spring. The sea is shallow and in this drilling area, only 10-19 meters. The license area is close to Gazpromneft’s Prirazlomnoye field, the only operative offshore oil-producing platform in the European part of the Russian Arctic. There are several onshore oil fields producing oil shipped to markets via a subsea pipeline to the offshore Varandey terminal operated by Lukoil. From there, ice-strengthened tankers bring the oil to Murmansk for reloading to larger tankers sailing to world markets. The discovery announcement comes after Rosneft head Igor Sechin, a close ally of Russian President Vladimir Putin, told an economic forum on Friday that Western sanctions are illegal, warning of a coming cataclysm in the global oil market. Both Putin and Sechin demonstrate reckless disregard for sanctions. In mid-June, Rosneft said it was going ahead with its Vostok Oil project in the Arctic, which Sechin has described as “the only project in the world that can bring a stabilizing effect on the oil market.” While Western analysts have speculated that Russia will not have the necessary technology under sanctions to grow oil production, Sechin has disagreed, despite the exit of partner Trafigura. “We have all needed competences, knowledge, and experience, and in these kinds of projects 98 percent of technology is produced in Russia,” Sechin told journalists about the Vostok Oil project.
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