East-Prinovozemelsky field

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East-Prinovozemelsky field
EPNZ 1-3 oil and gas areas.png
Location of the East-Prinovozemelsky blocks
Country Russia
Location Kara Sea
Offshore/onshore offshore
Operator Rosneft
Partners Rosneft
ExxonMobil
Production
Estimated oil in place 35,800 million barrels (~4.88×10^9 t)
Estimated gas in place 10,200×10^9 m3 (360×10^12 cu ft)

The East-Prinovozemelsky field (also referred as Vostochno-Prinovozemelskoye structure – meaning: East of Novaya Zemlya structure) is a gigantic undeveloped Arctic oil and gas field located on the continental shelf of Russia in the South Kara Sea between the Yamal Peninsula and Novaya Zemlya island.

History[edit]

The field is divided into three license blocks: EPNZ-1, EPNZ2, and ENPZ-3.[1][2] In October 2010, licenses for all three blocks were awarded to Russian oil company Rosneft.[3][4] In January 2011, Rosneft announced that it will form a strategic alliance with BP to develop the East-Prinovozemelsky oil and gas field.[1][2][4] For the development activities, a joint operating company was to be created in which Rosneft would have 66.67% and BP would have 33.33% of shares. Initial stages of exploration activities would to be financed by BP.[5]

The deal was blocked by BP's subsidiary TNK-BP, a joint venture with a group of Russian billionaires, known as AAR (Alfa-Access-Renova), due to a dispute over Russian exploration rights between the two companies, and was nullified.[6]

Rosneft–ExxonMobil joint venture[edit]

On 30 August 2011, Rosneft announced that instead of BP the partner for EPNZ-1, EPNZ-2 and EPNZ-3 will be ExxonMobil.[7][8][9] The two companies agreed to invest US$3.2 billion in a joint venture to develop the three East-Prinovozemelsky blocks, as well as a field offshore of Tuapse.[10] Under the terms of the contract, Rosneft will own two-thirds of the joint venture, with Exxon controlling the remainder.[10] The first oil produced from the fields is expected to be drilled in 2015, with ExxonMobil at least initially paying for most construction costs.[10] Total investment to the East-Prinovozemelsky blocks, according to Russian Prime Minister Vladimir Putin, could possibly reach as high as $500 billion, though ExxonMobil's officials said that in the near term, it is likely that investments will reach only tens of billions of dollars.[11]

Reserves[edit]

The South Kara Sea hydrocarbons basin lies on the same geological trend with the Western Siberian hydrocarbon province.[5] The East-Prinovozemelsky area covers 125,000 square kilometres (48,000 sq mi).[2] According to Rosneft, the estimated oil in place is 35.8 billion barrels (5.69×10^9 m3) and the estimated natural gas in place is 10.32 trillion cubic metres (364 trillion cubic feet).[5][12] Of this 21.7 billion barrels (3.45×10^9 m3) of oil and 2.4 trillion cubic metres (85 trillion cubic feet) of gas lies in EPNZ-1 block, 12.5 billion barrels (1.99×10^9 m3) of oil and 2.2 trillion cubic metres (78 trillion cubic feet) of gas in EPNZ-2, and 1.6 billion barrels (250×10^6 m3) of oil and 5.7 trillion cubic metres (200 trillion cubic feet) of gas in EPNZ-3.[5]

References[edit]

  1. ^ a b "BP, Rosneft form Kara Sea alliance". Offshore Magazine (PennWell Corporation). 2011-01-17. Retrieved 2011-01-30. 
  2. ^ a b c "BP and Russia in Arctic oil deal". BBC News. 2011-01-14. Retrieved 2011-01-30. 
  3. ^ "Rosneft and Gazprom clinch Arctic acreage". Upstream Online (NHST Media Group). 2010-10-15. (subscription required). Retrieved 2011-01-30. 
  4. ^ a b "BP and Rosneft in exploration pact". Upstream Online (NHST Media Group). 2011-01-14. (subscription required). Retrieved 2011-01-30. 
  5. ^ a b c d "Rosneft Strategic Alliance with BP" (PDF). Rosneft. January 2011. Retrieved 2011-01-30. 
  6. ^ Flynn, Alexis; Gronholt-Pedersen, Jacob (2011-05-18). "BP, Rosneft Still in Talks". The Wall Street Journal. (subscription required). Retrieved 2011-05-22. 
  7. ^ Yenikeyeff, Shamil, "BP, Russian billionaires, and the Kremlin: a Power Triangle that never was", Oxford Energy Comment, November 23, 2011. Retrieved 2011-11-24.
  8. ^ "ExxonMobil in $3.2bn Rosneft Arctic pact". Upstream Online (NHST Media Group). 2011-08-30. (subscription required). Retrieved 2011-08-31. 
  9. ^ Vasilyeva, Nataliya (2011-08-30). "Rosneft teams up with Exxon Mobil in Arctic deal". Bloomberg Businessweek. Bloomberg. Retrieved 2011-08-31. 
  10. ^ a b c Soldatkin, Vladimir; Golubkova, Katya; Erman, Michael; Scheyder, Ernest (1 September 2011). "Exxon, Rosneft tie up in Russian Arctic, U.S.". Reuters. Retrieved 2 September 2011. 
  11. ^ Kramer, Andrew E. (30 August 2011). "Exxon Reaches Arctic Oil Deal With Russians". The New York Times. Retrieved 2 September 2011. 
  12. ^ "Exxon In Multibillion-Dollar Russian Arctic Deal". NPR. 30 August 2011. Retrieved 2 September 2011.