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Despite much of the upstream industry’s Arctic ambitions being in deep freeze, Russia has been quietly operating its handful of producing projects with little fuss.
Despite the downturn and sanctions, Russia has grown production but there are signs of fragility in the energy sector, panelists say.
“Russia is increasingly looking east and the various deals made between Rosneft and China are likely to see more Russian crude head to China permanently,” an analyst told Bloomberg.
The company plans to more than double its oil and gas production from overseas fields in four years.
Russia relies on companies including ExxonMobil, BP, Halliburton and Schlumberger for the latest technology and expertise.
Oil is now flowing from the last of three shallow water but very harsh environment fields developed by ExxonMobil in the sub-Arctic Sakhalin area off the east coast of Russia.
OMV said the deal would reduce the group’s production costs, adding it would be entitled to the field’s dividends starting 2017, with annual payments of about $200 million expected in the mid-term.
Rosneft said the number of drilling rigs will increase by 19% following the deal, Reuters reported.
No agreement has been reached to date, the press release said, and any potential transaction requires regulatory approvals and other conditions including definitive documentation.
Russia as well as other non-OPEC and OPEC producers have agreed to slash output by almost 1.8 million barrels per day to fight global oversupply.
Russian energy company Gazprom and Austrian oil and gas group OMV reached an outline deal on Dec. 14 to swap a 38.5% stake in OMV’s Norwegian unit for a 25% stake in a section of Gazprom’s Urengoy gas field.
The country’s oil and gas condensate output remained at 11.11 million barrels per day (MMbbl/d) last month, down 100 Mbbl/d from levels agreed as the starting point for the accord.
Russian Energy Minister Alexander Novak confirmed earlier reports that OPEC and non-OPEC combined production cuts for January stood at 86% of initial targets, described by the International Energy Agency as "one of the deepest" in history, Reuters said.
Russia's Gazprom Neft, the oil arm of gas giant Gazprom, said on Jan. 20 it has launched two more production wells at the Prirazlomnoye offshore Arctic oil field.
The cuts came amid a cold spell in Russia, and in its oil production heartland of Western Siberia in particular, Reuters reported.
Russia's Gazprom has produced over 419 billion cubic meters of natural gas in 2016, CEO Alexei Miller said in a statement on Dec. 29.
Market players are concerned that the change of a top manager in charge of oil supplies might result in Lukoil supplying less oil to the domestic market, Reuters reported.
Rosneft had been under pressure to secure a sale of the 19.5% stake to help replenish state coffers, hit by an economic slowdown driven by weak oil prices and exacerbated by sanctions.
The two neighboring countries have already signed a deal to exchange older seismic data from the border zone, Reuters said.
Under the current plan, Rosneft is due to buy the 19.5% stake itself so the proceeds can fund the budget before the end of the year. Rosneft would then resell the shares to investors in the first quarter of 2017.
The helicopter was carrying employees of a contractor from oil major Rosneft’s Suzun oil field, part of the Vankor deposit, Russia’s northernmost onshore oil production project.