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EXCLUSIVE: Rosneft, partners to invest over $8 billion in Russia's offshore energy sector | Reuters

By Olesya Astakhova

MOSCOW Rosneft and its partners plan to invest 480 billion roubles ($8.4 billion) in developing Russia's offshore energy industry in the next five years, part of a bid to boost output from new areas, the Russian oil major told Reuters. Most Russian oil output comes from western Siberia, where fields are depleting, pushing firms to look for new regions. Sanctions complicate the process, barring Western firms from helping with Arctic offshore, deepwater and shale oil projects.Russia is producing almost 11 million barrels per day (bpd) of crude, slightly down from its peaks last year as the country has joined OPEC and some other non-OPEC nations in an output cut that runs to March to stabilise global crude prices.Of the 480 billion roubles allocated for offshore projects by Rosneft and its partners, the Russian company planned to invest 250 billion roubles in Arctic offshore between 2017 and 2021, the state-controlled firm wrote in response to Reuters questions."Development of hydrocarbon resources on the continental Arctic shelf is the future of the global oil production and one of key strategic priorities for the company," Rosneft, the world's biggest listed oil company output, said in an email.

It said the Arctic offshore area was expected to account for between 20 and 30 percent of total Russian production by 2050. Rosneft did not mention which partners would be involved in the investments. It said it had licences for 55 offshore blocks in Russia's Arctic, Far East and southern regions, which are believed to contain oil and gas resources. The Russian firm has sought tie ups with several global oil players to develop Russia's offshore regions. But a deal to work in the Arctic Kara Sea with U.S. ExxonMobil was suspended in 2014 after sanctions were imposed.

Rosneft said in its email that it planned to return to operations in the Kara Sea in 2019 but did not specify whether it would work alone or with a partner. The Russian firm also has deals for offshore work with Norway's Statoil, Italy's Eni and other firms.

Rosneft, ExxonMobil, Japan's Sakhalin Oil and Gas Development Co Ltd (SODECO) and India's ONGC are partners in the Sakhalin 1 project off Russia's far east coast.So far, Russia's sole Arctic offshore oil field is Prirazlomnoye in the Pechora Sea operated by Gazprom Neft, where production is gradually rising from about 40,000 bpd last year. Rosneft also said it planned preparation work next year at the Wild Orchid gas condensate field in Vietnam at Block 06.1. It did not say when production would start.($1 = 56.9989 roubles) (Writing by Katya Golubkova; Editing by Edmund Blair)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Jun 14, 2017 22:01 PM

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