Moscow pushes for more Arctic drilling

Russian Prime Minister Mikhail Mishustin chairs a meeting in Moscow on January 21, 2020. Mishustin has asked cabinet ministers to draft plans on energy drilling and exploration in the North. (Dmitry Astakhov / SPUTNIK / AFP / Getty Images)
Prime Minister Mishustin wants to tap into vast oil and gas resources on the Arctic shelf and commissions his cabinet ministers to make a plan for big drilling.

While governments and energy companies in Europe rapidly scale down investment in petroleum, the Russian side moves in the opposite direction.

The new Russian Arctic Strategy signed by President Putin on the 26th October includes big stress on hydrocarbon development, including Rosneft’s grand oil projects in the Taymyr Peninsula and Novatek’s expansion in Arctic LNG.

The document includes an ambition to produce up to 91 million tons of LNG per year by 2035 and a boost of Arctic oil production to 26 percent of total national output.

On Monday this week, Prime Minister Mikhail Mishustin followed up with a series of instructions for his cabinet ministers.

Arctic drilling

The list of 21 points includes a plan on drilling in Arctic waters. The plan is to be presented by the Ministry of Natural Resources by 18th December this year and include exploration and mapping, as well as sources of financing.

At the same time, the Ministry of the Far East and Arctic is requested to propose tax incentives for the oil and gas companies in the region. And the Ministry of Industry and Trade is commissioned to present a plan that is to boost national capacities in offshore technology and reduce dependence on foreign drilling and exploration equipment.

Big resources

Russia has vast hydrocarbon resources on its Arctic shelf and the country’s government is eager to expand into the pristine region. According to the newly adopted Arctic Strategy there is up to 85,1 trillion cubic meters of natural gas and 17,3 billion tons of oil on the Russian Arctic shelf.

Resources are abundant also on land, and Prime Minister Mishustin calls for the organization of a government session on the development of resources in the Yamal Peninsula. The meeting must be held before 10th December and include discussion on extraction, processing and transportation of hydrocarbons, the government decree reads.

Northern Sea Route

The list of instructions from PM Mishustin follows his visit to Murmansk in late October. Shipping on the Northern Sea Route was high on the agenda during that visit and conflicting views on route development was evident among the government ministers.

Whereas nuclear power company Rosatom has made clear that Vladimir Putin’s much-desired 80 million tons of shipments on the route by 2024 will not be possible, Minister of the Far East and Arctic Aleksandr Kozlov is confident that the President’s target can be met.

In the meeting, Kozlov listed the commodities that will help Russia reach the 80 million tons. A key share of the volumes is oil from Rosneft’s Vostok Oil project and LNG from Novatek’s Yamal and Arctic LNG 2 projects.

Prime Minister Mishustin now demands that Kozlov formalizes his outlook on Arctic shipping. By 4th December, the Minister of the Far East and Arctic will have to present an official prognosis on shipping flows on the Northern Sea Route by year 2030 and 2035. On the basis of that lies the minister’s estimates for year 2024, the Government informs.

Related stories from around the North:

Canada: Are potential Arctic security threats eclipsing urgent action on climate? A new study makes its case, Eye on the Arctic

China: Qingdao plays pivotal role in China’s Arctic strategy, Blog by Mia Bennett

Denmark: COVID-19 could delay Kingdom of Denmark’s Arctic strategy, Eye on the Arctic

Finland: Finland and Russia discuss cooperation between Arctic and Barents structures, The Independent Barents Observer

Iceland: Nordics should aim for common approach to China’s Arctic involvement says report, Eye on the Arctic

Norway: Good Fences? Good Neighbours? The Diplomatic Travails of Norway and Russia, Blog by Marc Lanteigne

Russia: Behind Putin’s new Arctic Strategy lies a quest for natural resources, The Independent Barents Observer

weden: Sweden to re-establish northern regiment, fears armed attack, The Independent Barents Observer

United States:  Arctic policy after the U.S. Election, damage control ahead?, Blog by Marc Lanteigne

Atle Staalesen, The Independent Barents Observer

Atle Staalesen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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