Development of Offshore fields is emerging as a key factor for Oil & Gas industry of Russia and the CIS countries
Offshore fields at present account for 30% of global oil and gas production and their share is expected to increase to 40% by 2015 with the development of key upstream projects in all parts of the world. Of the total global reserves of oil and gas 65% lie under sea waters (35% under the continental shelf, 30% in deepwater areas).
In the recent years the development of offshore fields has emerged as an increasingly important factor for the petroleum industries of Russia and the CIS countries. Will this factor stand firm under the pressure of the crisis currently experienced globally in the recent months? Latest offshore developments reflect different approaches to offshore projects on the part of oil and gas companies:
Late November Alexander Medvedev, Deputy Chairman of Gazprom’s management board, stated that the Shtokman project would not be in the risk zone even with prices falling below $50 per barrel. The project is jointly developed by Gazprom, Total and StatoilHydro through Shtokman Development AG, with the final investment decision expected in 2009. Project tenders are scheduled for the second half of 2009 and drilling program (total of 16 wells) to be completed by 2013.
· On September 4, France’s GDF Suez energy group acquired a 15% stake in a D-222 offshore exploration project in Azerbaijan's sector of the Caspian Sea (Yalama prospect). Exploration at D-222 (65%-owned by LUKOIL and 20%-owned by Azerbaijan’s SOCAR) will continue until late 2011 and if successful will enable GDF SUEZ group to increase its reserves by approximately 35 million barrels of oil equivalent.
· Despite the official announcement in early November of a 50% cut in its 2009 investment program from $8 billion to $4 billion, LUKOIL’s position towards its Caspian offshore operations, mainly in Russia’s sea section, remained unchanged – they will be financed in full, according to LUKOIL’s president, Vagit Alekperov. On November 5, LUKOIL started the drilling of the second exploration well on the prospective block D-222 (Yalama), located in Azerbaijan’s sector of the Caspian Sea.
· On November 19, ExxonMobil and TPAO, Turkey’s state-owned petroleum company, signed an agreement to invest between $400-450 million in the first stage of oil exploration in the Black Sea. If oil found, drilling in the region with estimated reserves of 10 billion barrels is expected to begin by the end of 2009.
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