Page 7 - GLNG Week 14 2022

GLNG COMMENTARY GLNG

Shell is withdrawing
from Sakhalin-2 and
Gazprom has limited
LNG experience.

This said, the fate of Arctic LNG-2 is less clear, keep production at the current level.
as TotalEnergies has said it will not invest any “As a result, the major risk to short-term
further in the project, due online in 2023. The Russian oil production is a lack of market for
first train is already 80% complete, but the pros- Russian crude and oil products,” the OIES said.
pects for the second and third trains “look a little “If import bans become more widespread and
murkier,” the OIES said. effective then oil production could be shut in,
“Finance could be found in Asia and per- although it should be borne in mind that in a
haps the Middle East, but at the very least some liquid global market it is likely that alternative
delay in the development timetable might be buyers would be found if suitable discounts are
expected,” the OIES said, noting that Novatek’s offered, as is already being seen.”
goal of producing 55-70mn tonnes per year However, an increasing share of Russian oil
(tpy) of LNG by the end of the decade now looks production is coming from hard-to-recover res- Shell may be
doubtful. ervoirs, offshore, using enhanced oil recovery
“The resources are certainly in place, but the (EOR) and other difficult sources such as tight removing some
market for any LNG is now more limited and oil and shale, the OIES said. key technical
the availability of Western liquefaction technol- “It is here where production might be at risk
ogy could certainly undermine development in the medium term, as new developments equipment and
prospects, as the domestic Arctic Cascade tech- become more remote and the technology
nology is limited to small trains at present,” the required to develop more complex fields is in software, which
OIES said. shorter supply as Western oil companies and,
Prospects for Rosneft’s Far East project perhaps more importantly, service companies could undermine
look bleak, given ExxonMobil’s departure, the end new investment and start to exit the coun- medium-term
OIES said, although it noted that it was already try,” the institute said. “This leads to the conclu-
unclear how much the US major was committed sion that short-term Russian oil production is efficiency and
to the project. not at risk from a technical perspective, but the
medium-term prospects may be.” optimisation.
Oil production The OIES concludes by saying that “col-
As for oil production, the impact of the Western lapse in output is not forecast and a short-term
departures “varies by location and timescale.” decline will be driven more by market forces
Gazprom, Rosneft and others are more than than technical issues, but the risk of Russian oil
capable of maintaining output at traditional production being markedly lower by 2030 has
Russian oilfields, the OIES said, and the domes- increased as a result of the reaction to the cur-
tic service sector has developed the abilities to rent war in Ukraine.”™

Week 14 08•April•2022 www. NEWSBASE .com P7