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Arctic Yearbook 2013
Filimonova
action policies to encumber the actions of the Ministry and private companies in order to safeguard
their monopolies on the offshore activities in the Arctic.
Gazprom and Rosneft Approaches Towards Offshore Oil & Gas Development
Policies
Rosneft and Gazprom have huge economic interests in the Arctic region due to their need to replace
the depleting fields in West Siberia and to guarantee their status as reliable energy suppliers.
Gazprom‘s involvement in Arctic offshore activities dates back to the beginning of the 1990s, when
the company became the main decision-maker in the Rosshelf consortium. In 1992 the consortium
was granted licences for Shtokman and Prirazlomnoye field development. Several plans were
initiated by Rosshelf to develop the Shtokman field from creating a floating liquefaction plant (in
1996) to building a pipeline from Vyborg to Murmansk and then to Peenemunde in Germany. There
were two main debatable factors that the main shareholder in the consortium – Gazprom –
considered the Arctic offshore exploration to be feasible by the end of the century. From a legal
point of view, the sufficient Russian legislation on the offshore activities regulation was lacking.
Economically, the Russian companies were neither financially nor technologically prepared for the
project development on their own.
The next threshold in Gazprom‘s offshore policy dates back to the beginning of the 21
st
century and
was linked with the interest of Gazprom to ship LNG from the Shtokman field to the US market. In
2008 Gazprom together with the Norwegian company Statoil and French company Total set up
―Shtokman Development‖ – a joint venture for financing, construction and operation of the first
project‘s phase. However, changes in the global gas market contributed to Gazprom diminished
interest in the field development. In particular, the rapid growth of shale gas production in the US
during the past few years has made gas exportation from the field to the American market less likely.
In addition, a launch by Qatar liquefied natural gas (LNG) exportation to Europe has caused an
increase of gas supply on the global market. This development, in combination with the world
economic crisis of 2008/2009, has led to a decline in gas consumption, a decrease in the price of gas,
and the emergence of a gas surplus in the world market. As a result, the development of the project
has been postponed for an uncertain period of time, and Gazprom‘s co-partner, the Norwegian
company Statoil, left the project in 2012.
Another factor that has restrained Gazprom in its offshore exploration is that the development of
Arctic offshore hydrocarbon reserves are connected to technological production challenges, high
investment costs and environmental risks, and the profits from hydrocarbon extraction will not be
reaped for many years to come. Since 2008, Gazprom has been negotiating with the government
regarding tax privileges for Shtokman field development, including the introduction of tax on
additional income, reduction of export duties, and lowering taxes on mineral extraction. Currently,
the government is working on legislation that will provide certain tax breaks for those projects for
which the production will begin after January 2016. In turn, Gazprom is lobbying tax privileges for
the projects whose commercial production will start in 2013. The company‘s position is backed by