MOSCOW: In the wake of the recently organized Arctic Summit in Arkhangelsk and Rosneft getting drilling activities underway in the Laptev Sea, one cannot help but think that Russia is carrying out a comeback to the offshore Arctic region. Such a policy turn might seem counter-intuitive, as EU and US sanctions still restrict Western companies (with more sophisticated know-how) from participating in Russian Arctic projects, but even more importantly, this happens against the background of Russia’s Energy Minister A. Novak declaring that Russian producers in the Arctic need a crude price of at least 70 USD per barrel to be profitable. But how much of it is mere political posturing and what represents a genuine change for the better in Arctic’s fickle business climate? As it often happens, it is very difficult to say at first glance.
Rosneft, Russia’s primary oil operator (i.e. the only one apart from Gazprom’s oil subsidiary) in the Arctic, resumed its activities in the most northerly of seas, by drilling the Central-Olginskaya offshore well in the Laptev Sea. Rosneft also stated that it intends to resume drilling in the Barents Sea next year and in the Kara Sea within two years, thus committing itself to conduct drilling works across the entire Russian section of the Arctic. The political facet of such a move is evident – demonstrating that sanctions did not succeed in putting a crimp in Russia’s oil sector, whilst leaving the door open for Arctic projects in cooperation with ExxonMobil (expected to be revived in 2019) or Statoil (ongoing, albeit at a relatively slow pace). President Putin himself ordered the beginning of drilling operations at the Central-Olginskaya field, emphasizing Rosneft’s role in developing the Arctic’s resources. Yet there is a twist of irony in that Rosneft boasts about being the only Russian company conducting drilling operations in the Arctic offshore, as apart from Gazprom no one else has the right to do so under the current legislation.
