Oil companies join efforts in Timan Pechora

Lukoil`s Varandey terminal (photo:

Practically all new field operators in the oil-rich Timan Pechora province intend to take use of Lukoil’s Varandey offshore terminal. That will boost oil shipping in the Barents Sea.


The oil companies operating in Russia’s Arctic Timan Pechora petroleum province join efforts within production and transport. Both Bashneft, which recently won a tender on the development of the Titov and Trebs fields, and Zarubezhneft, which operates several other fields, now confirm that they intend to team up with Lukoil.

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In addition, also Rosneft is allying itself with Lukoil. An agreement signed by the two companies in April this year paves the way for enhanced cooperation, also in the Timan Pechora province. Included in the deal is the joint development of the fields Naulskoye, Sovetskoye and Labaganskoye, reports.

With its pipeline connection to the Yuzhno-Khilchuyu field and the Varandey export terminal on the coast of the Pechora Sea, Lukoil controls key infrastructure assets in the region. The Varandey terminal, which was completed in year 2008, has the capacity to handle 12 million tons of oil per year. Currently the terminal handles about 7,5 million tons, all of it from the Yuzhno-Khilchuyu field. This infrastructure will now increasingly be used also by other companies operating in the region.

Read also: Yuzhnoe-Khykchuyu field opens new era in Nenets oil industry

The Timan Pechora province is not included in the monopolized oil pipeline grid of state-owned Transneft.

Lukoil has already sealed an agreement with Bashneft on a 25,1 percent stake in the Titov and Trebs fields, something which will secure a north-bound export through Varandey. –They have no other choice but to work with us, Lukoil Deputy Leonid Fedun said about the new alliance, reports. He adds that a deal is in the pipeline also with Zarubezhneft, which controls the regional Khoreyverskoye height, and that also this oil might be sent to Varandey.

The more oil pipelined to Varandey, the more oil will be shipped through the Barents Sea. And this trend will only continue. A new report on oil shipping in the region, presented recently by Aquaplan Niva and the Norwegian Barents Secretariat, predicts that oil tanker traffic in the Barents Sea region in the course of the next five years could increase to an annual 100 million tons.

Read also: Oil traffic capacity of 100 million tons

The role of the Timan Pechora province is a key in this development. Since year 2000, oil export from the region has increased from 9,62 million tons to 27 million tons. Total production in the region is now 32 million tons which account for 6,1 percent of the total Russian production, researcher Olga Eliseeva from the Institute of Energy Studies said at a recent conference. She believes that this growth will continue for a number of years. By year 2020, oil production in the region will amount to about 38 million tons. Of this about 24 percent will be produced offshore, RIA Novosti reports.