Shelf Crisis

Excerpt from Russian Petroleum Investor by

There should be a postponement of shelf projects until economic times are better, according to Russian deputy prime minister Igor Sechin. “In the near future, the shelf will not have major promise because it requres serious capital investments and will not pay off quickly given the current situation in the market.” he said. In today’s conditions of global financial crisis, nobody can any longer afford such volume of investments -- not the government, state companies or private traders.

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Dutch Propose Developing Yamal and Kara Shelf Gas Fields

by Vladimir Baidashin for Russian Petroleum Investor

Dutch companies led by Royal Dutch Shell (Netherlands/UK) have suggested to Russian authorities a joint development of natural gas deposits on the Yamal peninsula and the Kara Sea
shelf. The proposal includes provision of unique extraction technologies, pipeline construction, hydrocarbon processing and even the creation of artificial islands for extracting and processing facilities. A joint working group will emerge to study the offer and make conclusions, after which the parties will create project-specific joint ventures. Gazprom has estimated that developing Yamal gas deposits would require about $160 billion.

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West Kamchatka Emerging as Next Major Offshore Project

Rosneft president Sergey Bogdanchikov contends that the development of the West Kamchatka shelf in the Sea of Okhotsk will be on the scale of the Sakhalin-1 and Sakhalin-2 projects, with the likelihood of surpassing both. Rosneft is developing the promising sites with the Korean National Oil Corp. (KNOC). Estimates put the potential resources of the entire West Kamchatka shelf at 3.8 billion tons of hydrocarbons. Recoverable reserves at the license sites could be 800 million tons. According to Bogdanchikov, development requires approximately $24 billion. Drilling of the first exploration wells will take place in 2008.



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