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Rosneft together with partners invests in the shelf more than $8 billion

The largest Russian oil company Rosneft and its partners plan to invest 480 billion roubles ($8.4 billion) in developing Russia's offshore energy industry in the next five years.

14.Jun.17 10:59 PM
By Daria Zaytseva


Rosneft together with partners invests in the shelf more than $8 billion

Rosneft, which shares a monopoly with Gazprom on the development of the Russian shelf, in previous years concluded international alliances to work in the water area, but the sanctions of the West and the collapse of oil prices hampered the joint development of the shelf, which requires more investment than onshore fields, as well as high-tech equipment. Despite the sanctions, Rosneft promises not to slow down the pace of investment in the development of offshore projects.

"The total volume of investments in development of the continental shelf of the Russian Federation together with project partners for the next five years is estimated at 480 billion rubles," Rosneft said in a statement.

Previously, Rosneft predicted that from 2017 to 2021 will increase investment only in the Arctic shelf in two and a half times to 250 billion rubles, whereas in 2012-2016 the company invested 100 billion rubles.

Rosneft has offshore alliances with companies such as American ExxonMobil, Norwegian Statoil, Japanese Inpex, Italian, Venezuelan PDVSA, Chinese CNPC and Vietnamese Petrovietnam. The Russian company in 2014 together with Exxon opened a new large oil field in the Kara Sea - Pobeda, but the partners were forced to freeze the project due to sanctions.

Rosneft said that it planned to return to operations in the Kara Sea in 2019 but did not specify whether it would work alone or with a partner. The Russian company also has deals for offshore work with Norway's Statoil, Italy's Eni and other firms.

Experts estimate that by 2050, 20-30 percent of the total production of raw materials in the Russian Federation will be produced on the Arctic shelf. The company is optimistic about the economic feasibility of production on the Arctic shelf.

According to the Ministry of Energy, the cost of oil production on the Arctic shelf in the range from $ 35 to $ 100 per barrel, depending on the depth of the sea, remoteness from the shore, ice conditions. According to experts and analysts, the cost of production in the Arctic can exceed $ 100-150 per barrel.

So far, Russia's sole Arctic offshore oilfield is Prirazlomnoye in the Pechora Sea operated by Gazprom Neft, where production is gradually rising from about 40,000 barrel per day last year. Earlier it was calculated that the production is profitable at $55 per barrel. The representative of the company's offshore projects said that after 2020, when the major investments would pay off, the cost of production at Prirazlomnoye would be $10 per barrel.

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