Russian-led Arctic Oil Project to Cost $157 Bln

Monday, October 28, 2019

A ambitious new Arctic oil project led by Russia's top oil producer Rosneft will require about 10 trillion roubles ($157 billion) of investment, Russia's deputy energy minister Pavel Sorokin told reporters.

Vostok Oil, a joint project of Rosneft and Independent Petroleum Company (IPC), is set to include some oil fields that are already producing and others which have yet to start, including Rosneft's Vankor group and IPC's Payakhskoye field.

The government has broadly agreed a new tax relief package to help develop the Arctic, seen as a new oil-producing region for Russia, which is among the world's top crude exporters, Deputy Prime Minister Yuri Trutnev said this week.

Russia's heavy support of oil production via a number a special tax breaks has been hotly debated at a time when the government is raising other taxes on its citizens and increasing pension ages.

Alexei Sazanov, the head of the tax department at Russia's finance ministry, told reporters at the same event on Friday that tax benefits for Vostok Oil could cost up to 60 billion roubles per year. The comments by Sorokin and Sazanov were embargoed until early on Monday.

Russia's budget surplus, projected at 1.7% of gross domestic product this year, is expected to shrink to 0.2% in 2022, partly due to the various supports offered to the energy sector, a cornerstone of budget revenue.

Rosneft hopes that foreign investors will also invest in Vostok Oil, which it expects to produce up to 100 million tonnes of oil per year (2 million barrels per day), or a fifth of what Russia currently pumps.

IPC is led by Eduard Khudainatov, a former Rosneft chief executive and a close ally of Igor Sechin, who now runs Rosneft.


($1 = 63.8365 roubles)

(Reporting by Darya Korsunskaya; Writing by Katya Golubkova Editing by Catherine Evans)

Categories: Russia Arctic Oil

Related Stories

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Yinson Production Nets DNV Approval for New FPSO Hull Design

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

PV Drilling Takes Ownership of Noble Corporation’s Stacked Jack-Up Rig

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

Current News

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Eni-Petronas Gas Joint Venture Up for Launch in 2026

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com