“Arctic offshore oil production is only profitable at an oil price of 100-120 dollars per barrel” says Russia’s former prime minister and foreign minister Yevgeny Primakov.
Primakov says there is no reason for Russia to be in a hurry when it comes to developing oil projects in the Arctic, as the country has several other fields that can be developed for less money:
“Most [other] fields are already secured an acceptable return at a price of $60 dollars, and LUKOIL has said that production in Western Siberia is profitable even at $25,”he said according to RIA Novosti. However, when it comes to more ‘problematic’ oil, the situation is different, Primakov says:
“Arctic offshore oil production is only profitable at an oil price of 100-120 dollars per barrel. Is it really worth boosting oil production on the shelf under conditions such as now?”
“Despite the importance of the region to Russia, why should we not take a pause in development of Arctic oil and gas fields? Several of our competitors have already done it:USA drilled its last well on the Arctic shelf in 2003, Canada in 2005.”
From its June 2014 peak of $US115 a barrel, the oil price has tumbled almost 60 per cent. On Tuesday it reached a minimum since March 2009 – $46.4.
Yevgeny Primakov served as Russia’s Foreign Minister from January 1996 until September 1998 and as Prime Minister from September 1998 to May 1999.
Related stories from around the North:
Canada: Will Russia’s actions in Ukraine affect relations in the Arctic Council?, Eye on the Arctic
Finland: Rouble collapse hits Finland, Forex stops buying Russian currency, Yle News
Greenland: Arctic oil and gas must stay in ground to restrict warming to 2°C says study, Blog by Mia Bennett, Cryopolitics
Iceland: From Arctic Circle 2013-2014, a big drop in the price of oil, Blog by Mia Bennett
Norway: Currency drama has little impact on tourism in Barents region, Barents Observer
Russia: Russian crisis money for Novatek’s Yamal LNG project, Barents Observer
Sweden: Falling oil prices benefit Sweden, Radio Sweden
United States: World oil price decline siphons billions of dollars expected by Alaska, Alaska Dispatch News