Recently the Norwegian Parliament ratified the delimitation line agreement in the Barents Sea, and later this year the Russian Duma is planning to do the same. As the production rate of oil and gas on the Norwegian shelf is declining, the pressure and importance for the industry of finding a new large profitable well is high.
However, advisor Daniel Fjærtoft says that development of the border areas in the Barents Sea is dependent on activity on both Russian and Norwegian shelf. He believes that the state owned oil and gas companies in Russia might not be too interested in rushing into new projects in the Barents Sea at present.
Daniel Fjærtoft of the consulting firm Econ Pöyry has studied the future prospects of the borderline agreement. He believes that the resources are there, but that it will take many years before it is possible to exploit them.
- As long as there is a monopoly for the two state owned companies Gazprom and Rosneft on offshore exploitation of resources on the Russian shelf, Russia will probably not engage in any new projects in the Barents Sea, says Fjærtoft to BarentsObserver.
The Shtokman project and other large projects in Russia like on Sakhalin are so huge and bind up all available personnel and resources in Gazprom and Rosneft. Fjærtoft believes that even if the discovery is on the Norwegian side of the new borderline, the exploration of the field will need participation from the Russian side. Both when it comes to deciding the extent of the discovery and also for developing an infrastructure for the exploitation.
- With the large costs of developing oil and gas fields in the harsh climate up here, almost all projects in this sector will be dependent on a close cooperation between Norwegian and Russian companies in order to make it profitable.
Fjærtoft believes that it is important that Norwegian authorities and companies use all available opportunities to make Russia change their current offshore license policy. If this does not happen he doubts that there will be much activity in the eastern parts of the Barents Sea in the nearest future.
- If Russia opens for companies like Lukoil to apply for offshore licenses, it is much more likely that there will be activity in the border areas sooner, says Fjærtoft
