Sanctions could jeopardize security on Russian Arctic platform

Sanctions will make it even more difficult to drill in Russian Arctic ice.

The Prirazlomnaya platform is packed with Norwegian technology and is likely to soon feel the consequences of the western export ban on oil and gas equipment.


Several of the ongoing projects in the Russian Arctic could soon feel pain because of the sanctions. Russia has little experience from offshore oil and gas developments and is highly dependent on equipment from western companies. Among the projects which could be worst affected is the Prirazlomnoye project in the Pechora Sea. The project, Russia’s first offshore Arctic oil field in production, is packed with western technology and spare parts from abroad is a necessity.

The Norwegian oil industry itself estimates that it has delivered up 25 percent of all technology on board the installation.

In a worst-case scenario, project operator Gazprom Neft might not be able to get hold of crucial spareparts for the unique installation. That could ultimately put security at risk.

As previously reported, Gazprom Neft in June this year announced a tender on the modernization of the Prirazlomnaya platform.

The Prirazlomnaya is located in the icy and shallow waters of the remote Pechora Sea about 60 km from the port of Varandey.

After multiple delays, the Prirazlomnoye projects in December 2013 started production and the first tanker in April this year loaded oil from the platform reservoirs.

Also several other projects could suffer from the export ban. Among them are both Gazprom Neft’s Novoportovskoye project in the Yamal Peninsula and Novatek’s Yamal LNG project.

According to Goldman Sachs, Gazprom Neft might be the company worst hit by the sanctions. Of its about 60 million ton production, the company in 2015 intends to produce about 1,6 million tons from the Prirazlomnoye and Novoportovskoye projects, Finmarket reports.