Global warming opening up Russia’s Arctic oil

MOSCOW, Jan. 16 (UPI) -- Russian state-owned energy firms are preparing to move into the country's offshore polar regions.

On Jan. 15 Russian Deputy Prime Minister Arkady Dvorkovich's told journalists that the state-controlled Rosneft and Gazprom energy companies are to receive licenses to develop the 12 and 17 arctic continental shelf sectors. The decision is raising concerns among the country's private energy companies that they will be locked out of developing the country's potentially vast arctic hydrocarbon reserves.


Russia's natural resources ministry proposed on Jan. 15 that offshore oil and gas fields on the country's Arctic shelf that isn't wanted by state-controlled firms should be explored and developed by non-state companies.

Private companies have so far failed to break the monopoly of Gazprom and Rosneft on hydrocarbons exploration on Russia's offshore continental maritime shelf, as currently only Russian state-controlled companies, including Rosneft and Gazprom, are allowed to hold offshore licenses in Russian territorial waters, Russkoe Informatsionnoe Agenstvo news agency reported on Tuesday.

Currently energy companies that want to acquire licenses to work on the Russian continental offshore shelf have to have a minimum of 50 percent state ownership and foreign and Russian private companies have to sign contracts with either Gazprom or Rosneft.


In further bad news for Russian private energy firms, Gazprom is not interested in relinquishing to state control the licenses for those offshore fields it is not interested in, according to Gazprom CEO Aleksei Miller, speaking to reporters in Novy Urengoi, above the Arctic Circle.

Major Russian non-state energy companies, including Lukoil, Russia's second-largest crude oil producer, have lobbied for some time to be included in arctic energy development projects. Rosneft has some clout within the Russian government, as according to the Russian Federation's Energy Ministry, as in 2012 increased Rosneft production surged total Russian oil output to the highest level in the world, surpassing Saudi Arabia, with a new post-Soviet level of 10.37 million barrels per day.

Seeking to enlarge its share in the country's most lucrative export market, the government of President Vladimir Putin Kremlin has increased its ownership percentage in the country's oil industry more than 50 percent after Rosneft signed a contract to acquire Anglo-Russian TNK-BP for roughly $55 billion in a deal to completed later this year.

The acquisition makes Rosneft the world's largest oil producer, with an estimated output of roughly 4.6 million barrels per day, an amount exceeding OPEC member Iran's production. OPEC is the acronym for the Organization of Petroleum Exporting Countries.


Despite the state firms' cozy relationship with the Russian government, 2013-2014 could prove interesting for both Gazprom and Rosneft, as on Jan. 15 Russia's Accounts Chamber head Sergei Stepashin told reporters, "For the first time in five years we plan a full-scope audit of Gazprom, we haven't dealt with the company for quite a while," surveying "the efficiency of the company, non-core expenses along with issues concerning pipelines." The Accounts Chamber intends in 2014 also to audit Rosneft as well.

Latest Headlines