The state-of-the-art Prirazlomnaya offshore ice-resistant oil-producing platform (Credit: Gazprom)

Gazprom's Arctic oil project on track despite protest

Gazprom has announced that it is on track to begin oil production this year at the controversial Prirazlomnoye Arctic oil project.

The firm’s efforts to extract oil from the field in the Pechora Sea have ignited protests from campaigners over the dangers of possible oil spills in the pristine Arctic environment.

Yesterday Russia charged four Greenpeace activists and a journalist with piracy after an attempt to scale Gazprom’s production platform in protest, with the remaining 25 people arrested after the stunt charged today.

But in its first public remarks since the incident last month, the company announced that the protests had not disrupted operations.

"As was envisaged, production is expected to start by the year-end," Gazprom Neft Shelf, a unit of Gazprom, said in an email to Reuters.

Built by Sevmash Production Association, the state-of-the-art Prirazlomnaya platform has been designed to be able to resist to strong ice loads, be self-sustainable for long periods and operate year-round.

The platform will be used for well drilling, oil production, storage and offloading. 40 slanted wells are due to be drilled into the Prirazlomnoye oil field from the platform and it has also been designed to receive oil from other fields.

Gazprom has cited "technical reasons" for several delays to the start of production at Prirazlomnoye, which is designed to produce heavy, sour oil. Media reports have estimated total investment in the field, discovered towards the end of the Soviet Union, at between $4bn and $5bn (£2.5bn and £3bn).

Prirazlomnoye has estimated reserves of 526 million barrels of oil and Gazprom expects to reach peak production of 120,000 barrels per day in seven to eight years.

Concerns over the safety of offshore oil have intensified after BP's Deepwater Horizon oil rig exploded in 2010, killing 11 workers and spewing millions barrels of oil into the Mexican Gulf, though Gazprom said today that it is able to tackle any possible oil spills at Prirazlomnoye.

The Kremlin sees Arctic offshore oil and gas development as key to the future prosperity of Russia, which relies on hydrocarbon sales for more than half its budget revenue.

The Ministry of Natural Resources puts the offshore oil resources at 100 billion tonnes, which would be enough to satisfy global demand for 25 years at current consumption levels.

State-controlled Rosneft, Russia's top oil producer, has agreements with ExxonMobil, Eni and Statoil to tap the Arctic deposits, but those project are unlikely to eke out any oil and gas before the 2020s.

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