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2016 Jun 03

Rosneft & Statoil drill well in far east of Russia

Rosneft and Statoil have begun drilling an exploration well in the Sea of Okhotsk, in the latest sign that European oil companies are finding ways to continue work in Russia in spite of strained political ties.

“We are pleased to have entered a key stage in our long term-cooperation with our partner, Statoil – the drilling of exploratory wells in the Sea of Okhotsk,” Igor Sechin, chief executive of Rosneft and a key ally of Russian president Vladimir Putin, said in a statement on Thursday.

Statoil last year announced its plans to drill two wells in the Sea of Okhotsk in the far east of Russia in the summer of 2016. It drilled two onshore wells with Rosneft last year in Siberia, writes Jack Farchy.

The project is not subject to US and European sanctions, which prohibit western cooperation on Russian projects producing oil from the Arctic, from deepwater, and from shale. According to Rosneft, the two wells which it is due to drill this summer with Statoil are located south of the Arctic and at sea depths of less than 150m.

Executives and officials say European companies are unlikely to agree major new investments in Russia under the current sanctions regime, instead doing smaller deals to maintain their relationships and “keep the plate warm” for the moment when sanctions might be relaxed. Nonetheless, that sets them apart from US companies, such as ExxonMobil, whose activities in Russia have been sharply curtailed by the sanctions.

BP last year agreed to invest about $750m for a stake in Rosneft’s Taas-Yuriakh field, while Total is a major investor in the Yamal LNG (liquefied natural gas) project and Shell is partnering with Gazprom on the expansion of an LNG plant on Sakhalin Island in Russia’s far east as well as on the Nord Stream 2 pipeline.

“The implementation of offshore exploration and production projects is one of the most important strategic objectives of the company, and an investment in the future of the entire oil and gas industry,” Mr Sechin said this week.

“Rosneft is the only company in the country which is continuing work on new offshore projects, despite the extremely challenging external environment, in accordance with its license obligations.”

Rosneft said that the well was located about 420km from the port of Magadan, and was using a semi-submersible rig provided by China Oilfield Services Limited that had been specially adapted for low temperatures.

Source: www.ft.com

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