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Gazprom Ships First Oil From Arctic Drilling

Published: April 21, 2014 (Issue # 1806)



  • The oil tanker Mikhail Ulyanov arriving at the ice-bound Prirazlomnaya oil rig, situated 60 kilometers offshore.
    Photo: Gazprom

Gazprom on Friday shipped the first oil from the country's only offshore Arctic field in operation to Europe, marking the latest step in the development of the environmentally fragile and ice-cold site.

Greenpeace activists scaled the Prirazlomnaya oil rig last fall — to be arrested, initially on charges of piracy — in protest of the company messing with the pristine area and posing the risk of pollution.

The buildup of Russian oil supplies to Europe is also taking place as their political ties deteriorate rapidly over Ukraine.

"Today's event has a large significance for the strengthening of Russia's position on the global oil market," Gazprom chief Alexei Miller said in a statement.

President Vladimir Putin gave the command, in a live video linkup with the oil rig, to export the cargo, stressing the importance the government attaches to this remote and pioneering project. Miller was on hand at the oil rig for the occasion.

The consignment of 70,000 tons will make its way to northwestern Europe, bought by one of Europe's biggest energy companies, Gazprom said in the statement, without disclosing the customer.

The quality of the oil, branded "Arco" for Arctic oil, is worse than that of Russia's best-known blend Urals, said Grigory Birg, an oil analyst at InvestCafe, a brokerage. Therefore, it is likely to sell at a cheaper price, he said.

The company anticipates to ship a total of 300,000 tons this year, a fraction of the country's annual oil exports of more than 200 million tons. It did not say whether the entire amount is destined for Europe.

Gazprom dedicated a fair share of its statement Friday to an attempt to allay fears of a possible environmental disaster at the field. The design of the partially Russia-built oil rig "fully" removed the threat of spills during the production, storage and loading of oil, it said. The onboard storage tank has concrete walls that are three meters thick and coated with stainless steel, which is resilient to corrosion and wear.

"It is factor of safety exceeds the actual loads many times over," the statement said.

Sitting 60 kilometers offshore, the Prirazlomnoye field holds 72 million tons of recoverable oil. Production started in December and is expected to reach 6 million tons a year some time after 2020.

Ben van Beurden, chief of Royal Dutch Shell, pledged further commitment to Russia in a Friday meeting with Putin, amid sanctions slapped on the country by the European Union and the U.S.

Van Beurden re-confirmed Shell's plans to expand Russia's only liquefied natural gas, or LNG, in a joint venture with Gazprom and Japan's Mitsui and Mitsubishi. Shell also has an oil-producing project with Gazprom Neft, Gazprom's oil arm.

BP boss Bob Dudley said this week the sanctions had no effect on the company's business in Russia, Reuters reported.

Russia, the world's top crude oil producer and a leader in natural gas, has signed deals with international majors including ExxonMobil, Eni, Statoil and BP, mainly relating to projects in the Arctic.





 


ALL ABOUT TOWN

Friday, Oct. 31


Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Center’s Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.



Saturday, Nov. 1


The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at today’s Grand Prix Fitness House PRO, the nation’s premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.



Sunday, Nov. 2


Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.



Monday, Nov. 3


Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the city’s elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.



Tuesday, Nov. 4


Attend the premiere of Canadian director Xavier Dolan’s latest film “Mommy” at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.



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