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

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

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Synergy Marine Group Completes Conversion of LNG Vessel to FSRU

Japan Picks Wood Mackenzie to Assess Trump-Backed Alaska LNG Scheme

PTTEP Greenlights $320M Offshore CCS Project at Arthit Gas Field in Thailand

Technip Energies Gets FEED Job for Inpex’ Abadi LNG Project in Indonesia

CIP, Petrovietnam Team Up for Offshore Wind Project in Vietnam

EnQuest Enters Indonesia with Operatorship PSCs for Two Exploration Blocks

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Current News

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Brownfield Output Decline Accelerates, says IEA

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

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

DOF Secures Moorings Hook-Up Job in Asia Pacific

Saipem Bags $1.5B Contract for Türkiye Largest Offshore Gas Field

Floating Offshore Wind Test Center Planned for Japan

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