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Arctic Yearbook 2013
Scramble for the Arctic Offshore Oli & Gas Resources in Russia
Zarubezneft possesses experience in working on the shelf projects in Vietnam and regards this as its
golden opportunity for establishing a joint venture with the company Petrovietnam in order to work
on the Russian continental shelf in the Arctic. In 2012, Zarubezneft acquired shares of the energy
company ―Arktikmorneftegazrazvedka‖ which possesses significant experience in the exploration
and development of oil and gas deposits on the Russian continental shelf. The procurement of the
company has made Zarubezneft eligible to work offshore. However, the government‘s decision on
allowing the company to proceed with offshore activity is still pending.
Another fierce supporter for liberalization has been the Russian private oil company LUKOIL,
which began showing interest in offshore activities as early as the late 1990s. After the approval by
the Russian government to grant Rosneft licenses to 12 sites, and to Gazprom licenses to 17 sites,
LUKOIL started to consider other alternatives to obtain access to the Arctic continental shelf.
During the official meeting with the Russian president Vladimir Putin, the head of LUKOIL Vagit
Y. Alekperov expressed the company‘s intention to launch a geological survey at the Khatanga Bay
on the coast of Yakutia. According to an analyst from Sberbank Investment Research Valery
Nesterov, LUKOIL has been forced to engage in the least prospective offshore projects in order to
display its loyalty to the government, with hopes of getting access to the continental shelf in the
future (Melnikov, Popov et al, 2013). However, a few months after, the vice-president of LUKOIL
Leonid Fedun stated that ―[i]t would be cheaper for the Russian oil companies to develop deposits
on the mainland than on the continental shelf‖ (Muraviev, 2013). Such a radical change in the
company‘s policy has been spurred by a number of factors. The first factor deals with the existing
uncertainty concerning the Russian government‘s legal adoption of the liberalized offshore activity
rules, which has forced the company to reorient its development strategy from offshore to onshore
deposits. Secondly, the company is facing a problem of a gradual depletion of its deposits and oil
production declining. In order to keep energy production at a sufficient level and to maintain the
company‘s competitiveness in the national and international energy markets, LUKOIL is
considering purchasing several enterprises in West Siberia and in the Republic of Komi that already
own licenses for onshore field developments (Solodovnikova, Melnikov, 2013).
The current state of affairs around the subsoil legislation clearly manifests the Russian government‘s
position (with certain exceptions of certain Ministries) towards maintaining Gazprom and Rosneft
monopolies on the offshore activity and reducing the chances of private companies working
offshore. In addition, the recently signed agreements between Gazprom and Rosneft with the
foreign energy companies Total, Shell, ExxonMobil, Statoil, CNPC and Eni respectively, for a joint
development of deposits on the Arctic shelf have strengthened the state-controlled companies‘
positions by diminishing criticisms concerning the inability of foreign companies to participate in the
Russian offshore projects. The acquisition of offshore licensees by Gazprom and Rosneft
and the
prescription by the recently released Arctic Strategy on the creation of reserve fund deposits, leave
little room for maneuver by private companies to obtain access to offshore activities. In the long
term, there are certain possibilities in which the private companies could proceed with offshore
activity. For example, Gazprom‘s and Rosneft‘s inability to fulfill the geological survey requirements
set by the Ministry of Natural Resources and Ecology could force the government to review its
position towards subsoil law liberalization. In turn, Gazprom and Rosneft could implement counter