The Prirazlomnaya offshore ice-resistant stationary platform [Credit: Gazprom]

Ice-proof Arctic rig starts pumping oil

Russia's first Arctic offshore field Prirazlomnoye has started production of oil, energy company Gazprom said today.

The project is almost a decade behind its initial schedule and is one of the most controversial energy projects, seen as dangerous for the environment by green activists, who say that the drilling and storage platform is three decades old.

Russian authorities detained 30 Greenpeace activists in September who carried out a protest against the development by attempting to scale the platform. The protesters faced jail sentences of up to 7 years although an amnesty announced earlier this week covers the activists, meaning they will not face prosecution.

But President Vladimir Putin has said Russia's Arctic offshore riches are of a strategic importance for the country, which now is pumping an average of 10.6 million barrels of oil per day (bpd), close to its current capacity.

"We became the pioneers of Russia's Arctic development," Gazprom's Chief Executive Officer Alexei Miller said in a statement.

Gazprom said it sees overall investments into the project at around 200 billion roubles (£3.7bn), of which half had already been spent with the bulk accounting for the special ice-proof platform, and expects initial production at Prirazlomnoye at 12,000 barrels per day in 2014 with a plateau of 120,000 bpd in 2021.

However, start of production had long been delayed due to various challenges, including ageing equipment and a change in shareholders structure. Difficulties obtaining official clearances and technical problems also hampered the project.

Russia, the world's second-biggest oil exporter, is vying with Canada, Denmark, Norway and the USA for control of the oil, gas and precious metals that would become more accessible if global warming shrinks the Arctic ice cap.

Greenpeace has said that oil production in the pristine region risks spills similar to the Mexican Gulf disaster at BP's platform in 2010 as some of Prirazlomnaya platform's parts were used at another offshore project some 30 years ago.

The activists issued a statement today, saying the launch of production is "a dark day for the Arctic".

"Gazprom is the first company on Earth to pump oil from beneath icy Arctic waters and yet its safety record on land is appalling. It is impossible to trust them to drill safely in one of the most fragile and beautiful regions on Earth," Greenpeace said in a statement.

Gazprom has said it has taken all necessary measures to prevent any incidents.

The Arctic region is seen as an important source of potential growth for Russia, the world's largest oil producer, in the next decade, with global oil majors including ExxonMobil, Eni or Statoil clinching deals to enter the Russian Arctic, but production from these projects is not expected before the late 2020s.

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