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Joint extraction of Russian energy resources in the Arctic - platform for international mutually beneficial cooperation

04.04.2019 15:50

Recently, more and more countries have been showing interest in cooperation with Russia for the energy resources extraction in the Arctic region.One explains that by need of many developed countries of large oil and gas volumes. In addition, the reliable and continuous hydrocarbons supplies to leading markets from the Arctic shelf have got significant advantages compared with the supply of natural resources from Africa and the Middle East.

Thus, Saudi Aramco national oil company of Saudi Arabia, the world's largest oil company in terms of oil production and the size of its reserves, is discussing with the Russian company NOVATEK the possibility of purchasing up to 30 percent of the shares of the Arctic LNG 2 liquefied natural gas production plant.

This is not the first NOVATEK initiative to attract foreign investment. The Russian company and the French company Total have already signed a contract for the sale of a 10 percent of the Arctic LNG 2 shares in the framework of a binding agreement on the conditions for joining the project concluded in May 2018 at the XXII St. Petersburg International Economic Forum. Chairman of the Board of NOVATEK Leonid Mikhelson noted that cooperation with Total had been going on for many years. He said that trusting relationships based on mutual respect had been created. The joint work on the new Arctic LNG 2 project is the undoubted success of the mutually beneficial cooperation development.

Qatar is also showing interest in projects for the liquefied natural gas production in Russia. In particular, this was commented on by Qatari ambassador to Russia Fahad ibn Mohammed al-Attiyah. According to him, although Qatar’s participation in the Arctic LNG-2 has not been discussed yet, Doha may become a partner of Moscow in LNG projects. The ambassador also noted that the Qatar Investment Authority sovereign fund did not plan to sell its share in Rosneft in the near future (18.93%).

Amid these facts NOVATEK is negotiating with the largest Japanese energy companies Mitsubishi and Mitsui to join the Arctic LNG-2 project for the liquefied natural gas production. The sale of 10 percent of the future plant to them is being discussed. At the same time, the Land of the Rising Sun government is considering the issue of financial support for the project, which will not only help diversify LNG supplies to Japan, but will also contribute to the implementation of the economic cooperation plan between Tokyo and Moscow, proposed by Prime Minister S.Abe in 2016 to President of the Russian Federation Vladimir Putin.

The scale of the Arctic LNG 2 project must be noted, as it provides for the three phases construction for the liquefied natural gas production with a capacity of 6.6 million tons per year. The project is being implemented on the resource base of the Morning deposit. As of December 31, 2018 its proved and probable reserves according to PRMS standards amounted to 1.1 trillion. cu m of natural gas and 57 million tons of liquid hydrocarbons.

Therefore, the prospects of cooperation with Russia in the energy resources development in the Arctic are obvious. Russia's arctic hydrocarbon reserves are enormous, and the joint natural resources development and extraction will definitely bring impressive profits to all parties involved in existing or planned projects.