Consequently, Russia has been working on a major initiative to ensure that the NSR remains fully functional all year round, according to a senior Moscow-based oil analyst exclusively spoken to by OilPrice.com. “Thirty-three million tonnes of cargo was moved in 2021, 34 million [tonnes] in 2022, and just over 36 million [tonnes] last year,” said the Moscow-based analyst. “Rosatom [the Rosatom State Nuclear Energy Corporation, which manages a fleet of nuclear-powered icebreakers, among other things] and Novatek [Russia’s second-largest gas producer and spearheading its Arctic LNG developments] have told the Far East and Arctic Development Ministry that they can support an increase to 100 million tonnes by 2026 and 200 million tonnes [or cargo] by 2030,” he added.
Russia certainly has the Arctic resources to power this enormous expansion of exports, with an estimated 35.7 trillion cubic metres (Tcm) of gas and over 2.3 billion metric tons of oil and condensate in the region. The majority of these are in the Yamal and Gydan peninsulas, lying on the south side of the Kara Sea, as also analysed in my latest book. According to comments from President Putin, the next 10 to 15 years will witness a dramatic expansion in the extraction of these Arctic resources, and a corollary build-out of the NSR as the primary transport route to monetise these resources in the global oil and gas markets, especially to China. It was revealed in late 2021 that a massive new gas field in the Kara Sea itself had been discovered by Russian oil giant, Rosneft. Named after the Soviet military hero Marshall Georgy Zhukov, with natural gas reserves estimated at 800 Bcm, it is located in the Vikulovskaya structure, part of the East Prinovozemelsky-1 licence area, over which Rosneft has exploration and production rights running from 11 November 2020 to 10 November 2040. Rosneft is also developing the Vostok Oil project in Russia’s Far North that includes the Vankor cluster, Zapadno-Irkinsky block, the Payakhskaya group of fields and the East Taimyr cluster. Overall, it is estimated to hold proven liquid hydrocarbon reserves of at least 6 billion metric tons (about 51 billion barrels), all close to the NSR. Rosneft chief executive officer Igor Sechin told President Putin that with exploration underway at the Vostok Oil project, and the design work for a 770-kilometre oil pipeline and port having been completed, the scheme would create a “new oil and gas province” on Siberia’s Taymyr peninsula.
Russia’s Arctic gas and oil drive is also a vital part of Russia’s and China’s continuing efforts to subvert the U.S. dollar-based hegemony in the energy market, as also analysed in my new book, particularly as it features one of the world’s biggest oil and gas producers and one of its biggest buyers. Very early in the Arctic LNG projects’ history, Novatek’s chief executive officer, Leonid Mikhleson, said that future sales to China denominated in renminbi were under consideration. This was in line with his comments on the prospect of then-further U.S. sanctions - following Russia’s annexation of Crimea in 2014 - that they would only accelerate the process of Russia trying to switch away from U.S. dollar-centric oil and gas trading. “This has been discussed for a while with Russia’s largest trading partners such as India and China, and even Arab countries are starting to think about it... If they do create difficulties for our Russian banks then all we have to do is replace dollars,” he said. Such a strategy was tested in 2014, when the state-run Gazprom Neft tried trading cargoes of crude oil in Chinese yuan and roubles with China and Europe, to reduce Russia’s dependence on crude trading in dollars, in response to the initial Western sanctions against Russia’s energy sector. The thrust of these comments was echoed by former executive vice-president of the Bank of China, Zhang Yanling, in a speech in April 2022 that the then-latest sanctions against Russia would “cause the U.S.
Russia certainly has the Arctic resources to power this enormous expansion of exports, with an estimated 35.7 trillion cubic metres (Tcm) of gas and over 2.3 billion metric tons of oil and condensate in the region. The majority of these are in the Yamal and Gydan peninsulas, lying on the south side of the Kara Sea, as also analysed in my latest book. According to comments from President Putin, the next 10 to 15 years will witness a dramatic expansion in the extraction of these Arctic resources, and a corollary build-out of the NSR as the primary transport route to monetise these resources in the global oil and gas markets, especially to China. It was revealed in late 2021 that a massive new gas field in the Kara Sea itself had been discovered by Russian oil giant, Rosneft. Named after the Soviet military hero Marshall Georgy Zhukov, with natural gas reserves estimated at 800 Bcm, it is located in the Vikulovskaya structure, part of the East Prinovozemelsky-1 licence area, over which Rosneft has exploration and production rights running from 11 November 2020 to 10 November 2040. Rosneft is also developing the Vostok Oil project in Russia’s Far North that includes the Vankor cluster, Zapadno-Irkinsky block, the Payakhskaya group of fields and the East Taimyr cluster. Overall, it is estimated to hold proven liquid hydrocarbon reserves of at least 6 billion metric tons (about 51 billion barrels), all close to the NSR. Rosneft chief executive officer Igor Sechin told President Putin that with exploration underway at the Vostok Oil project, and the design work for a 770-kilometre oil pipeline and port having been completed, the scheme would create a “new oil and gas province” on Siberia’s Taymyr peninsula.
Russia’s Arctic gas and oil drive is also a vital part of Russia’s and China’s continuing efforts to subvert the U.S. dollar-based hegemony in the energy market, as also analysed in my new book, particularly as it features one of the world’s biggest oil and gas producers and one of its biggest buyers. Very early in the Arctic LNG projects’ history, Novatek’s chief executive officer, Leonid Mikhleson, said that future sales to China denominated in renminbi were under consideration. This was in line with his comments on the prospect of then-further U.S. sanctions - following Russia’s annexation of Crimea in 2014 - that they would only accelerate the process of Russia trying to switch away from U.S. dollar-centric oil and gas trading. “This has been discussed for a while with Russia’s largest trading partners such as India and China, and even Arab countries are starting to think about it... If they do create difficulties for our Russian banks then all we have to do is replace dollars,” he said. Such a strategy was tested in 2014, when the state-run Gazprom Neft tried trading cargoes of crude oil in Chinese yuan and roubles with China and Europe, to reduce Russia’s dependence on crude trading in dollars, in response to the initial Western sanctions against Russia’s energy sector. The thrust of these comments was echoed by former executive vice-president of the Bank of China, Zhang Yanling, in a speech in April 2022 that the then-latest sanctions against Russia would “cause the U.S.