China to drill in Barents Sea
The Chinese National Petroleum Corporation (CNPC) strikes a deal with Rosneft over the exploration of three fields in the Barents and Pechora Seas.
The agreement, which was signed during Chinese President Xi Jinping's state visit to Russia last week, includes the Zapadno-Prinovozemelsky structure in the Barents Sea and the Yuzhno-Russky and Medynsko-Varandeysky structures in the Pechora Sea, Kommersant reports.
With the cooperation in place, the CNPC becomes Rosneft’s third foreign partner in the Barents Sea. From before, agreements have been signed with Eni and Statoil. In addition, Rosneft has a comprehensive agreement with ExxonMobil in the Kara Sea.
The Zapadno-Prinovozemelsky structure is located to the west of the archipelago of Novaya Zemlya and to the northeast of Gazprom’s Shtokman field. The Perseevsky structure, the area which is included in Statoil’s agreement with Rosneft, is located to the west of the new Russian-Chinese field.
Most likely, CNPC will get a 33 percent stake in a joint venture and bear all costs for intitial exploration and drilling.
The Zapadno-Prinovozemelsky is among the least explored areas on the Russian shelf, and resource estimates are sparse. However, the hydrocarbon potential is believed to be considerable considering the highly perspective surrounding areas.
China has over the last couple of years displayed a quickly increasing interest in Arctic issues. As previously reported, China could already by year 2020 send as much as 15 percent of its international trade through Arctic waters. The country is also bidding for a permanent observer status in the Arctic Council. In the summer of 2012, the country sent its icebreaker “Xue Long” (Snow Dragon) in a historic mission along the Northern Sea Route and to the North Pole.
The Russian-Chinese deal comes after Rosneft’s meetings in Beijing in mid-February. Rosneft President Igor Sechin subsequently confirmed that “we are looking at a possible joint development of the shelf”.
The deal between Rosneft and CNPC is part of a major Russian-Chinese energy agreement which includes bigger oil Russian exports in return for Chinese credits and access to Russian resources.