Gazprom and Shell are joining forces to pursue oil and gas resources in the Russian Arctic, with the Anglo-Dutch company signed up to a 33.3% stake in its consort’s Arctic exploration projects.
Whilst President Vladimir Putin visited the Netherlands, Gazprom CEO Alexey Miller, and the chairman of Royal Dutch/Shell, Jorma Ollila, used the time to sign a memorandum, which will also see Gazprom receive a stake in Shell’s offshore projects, such as in the Orange Basin in South Africa.
The plan is to jointly develop the North Vrangel section of the Chukotka Sea, and the north-western section of the Pechora Sea.
Gazprom expects the Federal Subsoil Resources Management Agency to issue both licences by the end of this month.
Both companies have worked together before; they signed a global co-operation protocol in 2010, developed the Sakhalin-2 project in partnership, currently operate Russia’s only LNG plant together, and BP is still an official partner of Gazprom Neft.
Last summer, Shell’s CEO Peter Vosser said the super-major was open to further investments in Russia and was looking at opportunities either oil or LNG.
Despite ongoing ructions over TNK-BP . . . most recently international investors in the company have appealed to majority owner OAO Rosneft’s chief executive to resolve a conflict that has caused the value of their TNK-BP shares to plunge by 50% in the past six months, highlighting worries about the rights of minority shareholders in the country . . . Russia is said to be actively courting international oil corporations such as Shell.
Moreover, Moscow has even introduced tax concessions to try to encourage inward investment.
Gazprom rival Rosneft has struck a series of deals with the likes of ExxonMobil, Statoil and ENI for Arctic exploration and in March confirmed it was also now looking at projects with BP, its 20% shareholder.
Meanwhile, in the North American Arctic, both Shell and ConocoPhillips are experiencing delays to their programmes.
Shell’s problems have been massively publicised and, in March, the US Department of the Interior told the company that it would have to provide a detailed plan addressing numerous safety issues before it could resume its drilling operations in Alaska’s Chukchi and Beaufort Seas.
Now ConocoPhillips has called a halt to its 2014 oil exploration plans in the Chukchi Sea “given the uncertainties of evolving federal regulatory requirements and operational permitting standards”.
The company has stated that “it would not be prudent at this time to make the significant monetary commitments needed to preserve the option to drill in 2014”.
Trond-Erik Johansen, president of ConocoPhillips Alaska, said on April 9: “While we are confident in our own expertise and ability to safely conduct offshore Arctic operations, we believe that more time is needed to ensure that all regulatory stakeholders are aligned.”