Russia’s former prime minister suggests pause in Arctic oil & gas projects

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Former Prime Minister Yevgeny Primakov pictured here in 2007. (Ilmars Znotins/AFP/Getty Images)
Former Prime Minister Yevgeny Primakov pictured here in 2007.
(Ilmars Znotins/AFP/Getty Images)
“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

 

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