Gazprom’s subsidiary, Gazprom Neft, has signed a memorandum of understanding with India’s ONGC Videsh on joint implementation of offshore projects.
Gazprom Neft and ONGC Videsh, a subsidiary of India’s Oil and Natural Gas Corporation, signed the deal in the presence of the Russian Minister of Energy Alexander Novak on Thursday, March 29, during the International Arctic Forum.
At the forum, named “Arctic: Territory of Dialogue” taking place in Arkhangelsk, the companies announced its mutual intent to join forces for implementation of offshore hydrocarbon production projects in Russia and elsewhere.
The parties expressed their intent to exchange best technical, production, and commercial practices regarding field development in the Arctic and on the Sakhalin Island, as well as to explore the possible use of these at license blocks owned by Gazprom Neft.
According to Gazprom Neft’s statement, the memorandum envisaged a study of both companies’ individual experience in conducting geological prospecting and hydrocarbon production at offshore fields in the regions of mutual interest for Gazprom and ONGC.
International Arctic Forum
Energy Minister Novak was also one of the speakers at the International Arctic Forum. In his address, he discussed the potential the Arctic has.
In his speech during the Forum, he said that the deal for joint offshore developments between Gazprom Neft and ONGC on possible offshore exploration in Russia included the Arctic Dolginskoye field located in the center of the Pechora Sea, 74 miles south of Novaya Zemlya Archipelago.
Novak told Bloomberg in an interview that China is also one of the countries showing a “big interest” in exploration and development in the Russian Arctic which he described as “our (Russia’s) backup stock.”
He said that Russia expected investments in the Russian Arctic to reach as high as $600 billion in the next 20 years and that the total initial recoverable resources in the Arctic were 286 billion tons, around 60 percent of all hydrocarbon resources in Russia. He did say that Arctic exploration in Russian needs oil prices between $70 and $100 a barrel.
Novak added that Russia planned to boost exploration in the Arctic Barents and Kara seas from 2019, hinting the date of the expected oil market recovery. The Energy Minister also hopes that the cost of offshore development may fall as Russian companies adopt new technologies.
Offshore Energy Today Staff