PetroChina to Explore Arctic Shelf with Rosneft, Gazprom

Russia’s remote oil-rich Arctic Continental Shelf may welcome joint exploration by PetroChina, Russia’s Rosneft and Gazprom, the first two largest oil and gas companies in Russia, a Russian media outlet reported. According to the media, PetroChina is expected to provide capital and essential equipment, in exchange for the right to exploit Arctic oil and gas and the related agreement would be signed

An official from Russia’s Mineral Resources Development Bureau was quoted as saying that Russia should boost exploration on the continental shelf through all channels. Analysts believe that Russia lacks the capital to explore on the shelf by itself and needs foreign capital to fill this void.
For Russia, PetroChina will be an ideal partner, as the growing cooperation between PetroChina and Rosneft in recent years has shown. As early as July 2005, PetroChina and Roseneft inked a long-term cooperative contract. Last summer, PetroChina even purchased shares of Roseneft IPO for US$500 million. Last October, the two sides formed a joint venture that enables them to explore, develop, and market oil and gas resources in Russia’s eastern Siberia area.

Because oil and natural gas are regarded as strategic resources, Russia’s government only allows joint exploration if foreign companies participate.

As the top natural gas exporter and second-largest oil exporter, Russia holds 13 percent of the world’s oil and 35 percent of its natural gas. Growth of the massive country’s oil and gas production has slowed down in recent years, however, as the potential growth of traditional production has been drying up. Therefore, experts believe that extending exploration activities to the offshore continental shelf is a must for Russia.

Rigzone