Energy Ministry: Foreign oil companies may be allowed to drill on Russian shelf
5.10.12 14:14 By Peter Kanaev, edited by Robert Gally
Russia may soon be ready to issue licenses for offshore fields to foreign corporations. Ministry of Energy is discussing this radical liberalization of the rules in the Arctic will present them to international investors in London. Currently companies with foreign capital can participate self drilling, but only as minority partners to Gazprom and Rosneft.
This new liberalization of the rules is similar to what President Vladimir Putin had talked about earlier, but his comments were only in terms of allowing private Russian companies, not foreigners.
Energy Minister Alexander Novak told the Financial Times that "Now the industry may change… Foreign companies will be able to obtain licenses for offshore projects. they will become license co-owners."
While the final decision to allow foreign oil companies is still pending, those that will to apply for licenses will be assessed according to their financial capacity, technology levels, and experience in implementing environmental programs.
The Energy Ministry noted that oil production on the shelf must make up for older, depleted fields. This means that instead of increasing production, it should first be stabilised at 510 million tons per year by 2020.
The announcement of the possible liberalization of offshore development in the Arctic was made by Novak the night before his meeting with international investors and top management of oil and gas companies in London. The Energy Ministry forecasts a total investment of around $1 trillion. "We want to show that you can invest in Russia," Novak explained earlier .
The Norwegian oil company Statoil said they were satisfied with the latest initiative of the ministry. "It simplifies the structure of investment by international companies in Russian projects," said Tim Dodson, head of production at Statoil. According to him, the new scheme "is much closer to that to what we are accustomed to."
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