RUSSIA Barents Sea still languishing in political limbo

Dev George Managing Editor Barents Sea area map

Feb 1st, 1997

Gazprom, Rosshelf, and partners predicting production post-2000

Dev George
Managing Editor

Efforts to define the prospects beneath the Barents Sea have been as weak as Russian President Yeltsin. Everyone knows there are enormous oil and gas resources under the icy waters, but little has been done other than political posturing and one pronouncement after another about one program or another or one operator or another, as if they are about to kick off the world's biggest petroleum enterprise. Hardly. With but a few wells as the exceptions, nothing has been done since the Soviet Union fell to establish a political and economic environment in which international companies can operate that might push the sorely needed exploitation of the Barents Sea beyond the planning stage.

Soviet explorations found the numerous structures that are likely hydrocarbon bearing reservoirs, but their extraction technology was not up to the hostile locale, so they put all their development efforts into onshore plays such as those of Western Siberia and the easier on and offshore fields of the Caspian region. Not long after the Soviet fall, however, a contract was let to examine the exploitation potential of the Barents Sea's largest structure, Shtockmanovskoye Field, to a joint venture partnership that included the Finnish Barents Group (Neste, IVO, and W?rtsila), but upon completion of that study, the contract for exploiting this field went to Russia's own cobbled out operating company, Rosshelf, which was incapable of undertaking such a project on its own.

Russia's only reasonably efficient state company, the huge gas operator Gazprom, realizing Rosshelf's inability to go it alone, renewed the link with Norsk Hydro, Neste, and Conoco, who had been rejected three years ago, and added Total, in a new scheme to jointly develop the massive Shtockmanovskoye gasfield.

Russia's Rosshelf and Gazprom have since announced four licensing rounds for the Barents and Pechora Seas over the next six years. Last year, the first round offered two Barents Sea blocks off Murmansk and the Pomorskoye Block in the Pechora Sea. This year, it is expected that the Ledovoye Block in the Barents Sea will be offered, as will a block adjacent to Pomorskoye. In 1999-2000, the Shtockmanovskoye Block and a block off Novaya Zemlya are scheduled to be offered, and in 2001-02, two additional blocks in the central Barents will be offered. The Prirazlomnoye, Ludovskoye, and several other highly prospective blocks will be retained for domestic licensing. 3D seismic surveys are now being conducted by both Sevmorneftegeofizika and Geco-Prakla.

Barents Sea gas resources are estimated at more than 10 trillion cubic meters, with Shtockmanovskoye Field holding about a third of that amount - making it larger than the combined gas resources of Norway. The field, with more than 141 tcf gas, lies in approximately 1,000 ft deep water, with occasional iceberg infestations. Rosshelf's President Evgenii Velikhov once stated that the field would be developed using three permanent, concrete gravity-base platforms linked to Murmansk via gas pipelines. He predicted first production at around 80 million cu meters a day beginning in 2001, but neither the development plan nor the production date appear feasible today. Plans are set, too, for development of Prirazlomnoye, an oil reservoir, but little other than test drilling has occurred.

Two other Barents Sea fields, Arkticheskaya and Dudlovskoya, are not even scheduled for development but they are under study. Both are deepwater prospects. Arkticheskaya will probably require 20-30 wells and an oil export line while Dudlovskoya, a gasfield, will be developed with five to ten wells with pipeline transport of gas and condensate. Russia's other giant gasfield, Rusanovskaya, believed to hold gas reserves of 282 tcf, lies in only 50 meters water in the nearby Kara Sea, but is accessible only two or three months a year without icebreakers. Russian and international geoexplorationists posit from Rusanovskaya and related structures that this region of the Kara Sea shelf may hold one of the world's most extensive concentrations of giant offshore gas fields. The Leningradskaya and Zapadno-Sharapovskaya Fields, just 30 and 80 miles south of Rusanovskaya, respectively, could both very well prove to be supergiant gas reservoirs, if current studies prove correct.

Professor Pau Jumppanen, managing director of the Finnish Barents Group, believes that the energy ventures of the Barents Sea will not start up until the next decade, with fields producing oil and gas about the year 2010. The reasons are simple: there is virtually no infrastructure, the geographic features and ice conditions of the sea are different - ice conditions in Russia are influenced by the shallow waters and by currents (The Gulf Stream, for example, has a strong influence on ice conditions in the western sector of the Barents Sea.), and crime and lack of security in Russia are serious obstacles to any real efforts at bringing the Barents Sea into production.

Barents Sea promotion has faded. Currently, there is little activity there, perhaps two rigs at work, more likely just the one on Schtockmanovskoye. Rosshelf simply isn't up to the task of dodging icebergs and bringing the field's enormous reserves of gas onstream from their icy, deepwater berth. Rather than the originally predicted onstream date, realistic forecasts put it more at 2007-10. Other Barents Sea fields such as Arkticheskaya and Dudlovskoya and the other giant gasfield, the Kara Sea's 282 tcf Rusanovskaya, are certain to be even farther away.

Copyright 1997 Offshore. All Rights Reserved.

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