Tuesday, October 3, 2023
 
 

Gazprom Neft Well-Prepared For US-EU Sanctions

- Advertisement -

Gazprom Neft has been well prepared to face Western sanctions, a source close to the company told New Europe on October 10. The oil arm of Russian gas monopoly Gazprom expected that sanctions would put some restrictions and some limits in its operations abroad and started talking to its Eastern partners and drilling companies in late spring.

Gazprom Neft was dealt a blow earlier this month when Royal Dutch Shell suspended work on its joint venture with the Russian oil company to develop Russian shale oil, after the West imposed sanctions on Russia over Ukraine.

In September, the United States banned its firms from supporting exploration and production activities in deep water, Arctic offshore and shale projects with Gazprom, Gazprom Neft, LUKoil, Surgutneftegaz and Rosneft. The sanctions also shut out Gazprom Neft and other Russian energy companies from Europe’s long-term borrowing market.

The source noted that Gazprom Neft cannot take loans longer than 30 days right now in Europe. All of the Russian oil companies were cut off from the technologies for the offshore oil drilling. So right now Gazprom Neft is talking to China and other Asian countries, the source said.

Shell suspended the development in its joint venture with Gazprom Neft in western Siberia to develop deposits of the Bazhenov Formation in the Khanty-Mansi Autonomous Okrug.

Shell continues working on other projects that are developing conventional oil in Russia including its Salym joint venture with Gazprom Neft.

Unlike the US, Russia is yet to enjoy a shale revolution. However, Moscow had hoped that the development of Russian shale reserves would be an important driver of new production over the next five to 10 years.

Following tax breaks for shale oil projects, which came into effect in Russia a year ago, Western majors Exxon, Shell, BP, Total and Statoil signed shale joint ventures.

An estimated 75 billion barrels of technically recoverable shale oil resources may lie in the Bazhenov formation, according to the US Energy Information Administration.

The source told New Europe that Russia is really interested in these shale deposits. “But I don’t think that development of the shale oil in Russia will come to some kind of interesting moment pretty soon because we have a lot of ordinary oil and common oil reserves that we have to explore and develop at the moment. And shale oil, of course, it is interesting for us but it’s still a matter of time,” the source said.

“At the moment we actually have the opportunity to so somehow produce shale oil by ourselves. We probably have the technology. But it’s too row and too new for us. Of course, it’s always better in means of economic viability to run the projects with a partner that knows what he is really doing. But if we don’t have this partner we could run the projects by ourselves,” the source said.

The western sanctions reportedly won’t affect Gazprom Neft’s more protracted projects for oil extraction from submerged shelves, mostly the Pechora Sea shelf in the Russian Arctic.

The Arctic contains an estimated 20% of the world’s so-far undiscovered deposits of fossil fuels, and Russia itself is thought to have the world’s largest deposits of shale oil.

follow on twitter @energyinsider

Previously on Energy Insider:

US, EU Sanctions Push Iran Toward Russia, China

EU’s Cold War With Russia Worries German Business

Serbia Says Bets Off For South Stream

- Advertisement -

Subscribe to our newsletter

Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

Latest

Iran protesters mark anniversary of “Bloody Friday”

Residents in the southeastern Iranian province of Sistan and...

US announces Israel’s acceptance into the Visa Waiver Program

Israeli citizens will be allowed visa-free entry into the...

UN General Assembly 2023: More progress urgently needed on Sustainable Development Goals

The 78th United Nations General Assembly (UNGA) kicked off...

Don't miss

Iran protesters mark anniversary of “Bloody Friday”

Residents in the southeastern Iranian province of Sistan and...

US announces Israel’s acceptance into the Visa Waiver Program

Israeli citizens will be allowed visa-free entry into the...

UN General Assembly 2023: More progress urgently needed on Sustainable Development Goals

The 78th United Nations General Assembly (UNGA) kicked off...

Europe’s lawmakers see opportunity for regime change a year after Iran’s latest uprising

On September 21, representatives of various political groups held...

Interest surges in Turkmen gas

Turkmenistan's huge gas reserves have been generating considerable interest from potential importers following Ashgabat's announcement in late July that it is open to the development...

European aviation industry embraces new jet fuel regulation

The European Parliament on September 13 approved a new law to increase the uptake of sustainable fuels, such as advanced biofuels or hydrogen, in...

Nairobi Declaration calls for global tax on fossil fuel trade, maritime transport, aviation

As the curtains came down at the Africa Climate Summit (ACS23), heads of state and government adopted the Nairobi Declaration, calling on world leaders...

Mongolia to expand its economic and trade partnerships

Mongolia, the landlocked mineral-rich country bordered by Russia and China - the world's two preeminent authoritarian-run nations, is looking to expand its economic, trade,...

Turkmenistan signals major change in energy-export stance

A big shift is brewing for Caspian Basin energy exports. In a diplomatic about-face, Turkmenistan has signaled its readiness to develop a Trans-Caspian pipeline...

Can Central Asia escape China’s debt trap?

While Washington focuses on the war in Ukraine, Russia and China seek to expand their influence in regions where the US is not sufficiently...

Kazakhstan’s Deputy FM says EU & US ties remain strong as Central Asia’s largest country emerges as regional power

In the three-plus decades since Kazakhstan emerged as an independent nation from the ashes of the Soviet Union's 1991 collapse, the Central Asian giant...

Energy crisis prompts SMEs to boost renewables, energy savings

The energy crisis, high prices and threat of supply disruption following Russia’s war against Ukraine has prompted many small and medium-sized enterprises (SMEs) to...