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Morning Headlamp - Russia continues Arctic activity in US' absence

Gazprom Neft producing oil in Arctic waters


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Gazprom Neft to be involved in development of Russian geological prospecting equipment for offshore projects.

Photo: gazpromneft.com

Making serious headway. According to a Forbes report, Russian oil company Gazprom Neft, the country's fourth largest oil producer, said two weeks ago that four wells were now in production at the northern Prirazlomnoye field after two more were successfully started. The Prirazlomnoye field is an Arctic offshore oilfield located in the Pechora Sea, south of Novaya Zemlya, Russia. Russian President Vladimir Putin also opened the Arctic gate marine oil terminal on May 25, which provides access for Russia's Arctic-sourced crude to both European and Asian markets. Three terminals on Russia's northern coast in the Arctic circle handled a combined 230,000 bpd in the second quarter of 2016, almost doubling from 130,000 barrels as recently as January last year, with projections for that to increase to around 400,000 bpd by 2020 – oil and revenue that Russia will exploit to its fullest.

 

Might as well wave the white flag. In another piece, Forbes contributor David Blackmon argues that the DOI Five-Year plan marks a "surrender" in US Arctic policy. According to Blackmon, "As Russia gears up to dominate the Arctic region, having created the world's largest fleet of ice-breaking ships and even going so far as to plant its national flag at the North PoleDoD officials have let it be known that they see no conflict between energy exploration in the Beaufort and Chukchi and their own military operations. Indeed, there is a strong case to be made that oil and gas operations in the region can actually coordinate with and help to strengthen the U.S. military's presence there…Every DOI five-year plan for development of energy resources in federal waters is important to the nation's future. These plans set the parameters for the exploration and development of a significant share of our oil and natural gas, which have long been the main drivers of the U.S. economy, such a significant portion that the collection of royalties from oil and natural gas produced on federal lands is the federal government's second largest source of revenue."

 

Every step we take out of the Arctic is a step forward for other world powers—more often than not, Russia. While the icebreaker and offshore lease discussions are frequently bogged down by partisan politics, other countries are capitalizing.

 

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First Reads

A Deal With The Devil? Russia Kicks Up Artic Drilling
Forbes, Tim Daiss, August 22, 2016

Surrender In The Arctic: The DOI Five-Year Plan
Forbes, David Blackmon, August 22, 2016

Louisiana's sinking coast a $100 billion nightmare for Big Oil
Alaska Dispatch News, Catherine Traywick, August 21, 2016

NANA shareholders seek meeting over company finance concerns
Alaska Dispatch News, Annie Zak, August 22, 2016

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