Kremlin supports Lukoil’s Arctic ambitions

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The Russian presidential administration supports opening the Arctic shelf for private companies. This could open up for Russia’s biggest private oil producer Lukoil.

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Lukoil might be about to get the Kremlin’s blessing for oil drilling in Arctic waters. (Photo: Lukoil.ru)

The economic crisis and Western Sanctions that have made Rosneft and Gazprom’s projects in the Arctic harder to carry through, can lead to a change in Russia’s approach to field development on the Arctic shelf, Kommersant writes.

According to the newspaper, the presidential administration supports softening the strict regime of permissions to work on the shelf. President Vladimir Putin’s Assistant Andrey Belousov is one of the main lobbyists.

As previously reported, Lukoil is ready to invest billions in offshore projects if granted access to the shelf. Today, federal legislation allows only state-owned companies permission to operate shelf projects. Consequently, only Gazprom and Rosneft have licenses in Russian Arctic waters.

The presidential administration is not happy with the tempo the two state companies have had in their Arctic projects. According to Belousov, the tempo and scope of the geological surveys “cannot be called satisfactory, something that creates significant risks for the task of maintaining oil and gas production in the long term.”

Also President Putin has expressed that federal authorities will support Lukoil’s quest for access to new exploration areas.

There are 137 licenses for shelf development. 40 of these are owned by private companies, given before the legislation was changed in favor of state companies.

Lukoil has experiences from offshore drilling in the Caspian Sea and is a major oil producer in Arctic land projects in the Nenets Autonomous Okrug and the Komi Republic. The company has also looked at several projects in Russian territorial waters, near the coast, among them in the Khatanga Bay in the Laptev and bays in the Barents Sea, Pechora Sea and Sea of Okhotsk.

Lukoil is also a license bidder in Norwegian Arctic waters and is expected to take an active part in the upcoming 23rd Norwegian License Round.

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