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Aker BP, meanwhile, is pushing ahead with counting on Arctic fields to deliver extra pro-
the Hod redevelopment scheme – a project it duction that can offset declines at older deposits
shelved back in April because of spending cuts. further south. But the permafrost issue is likely
Norway’s offshore sector managed surprisingly to drive up costs in the already high-cost region.
well after the 2014 oil price crash, and looks set In other news, Gazprom Neft is preparing
to persevere once more thanks to government to launch development of the Bazhenov tight
support. oil formation in Western Siberia. The company
Undeterred by current market uncertainty, said this month it had sunk its first exploration
the oil majors are continuing with North Sea and appraisal well into the formation. At current
divestments. ExxonMobil has revived plans to prices, targeting unconventional oil in Russia
sell its UK North Sea business, which comprises is unfeasible. But Gazprom Neft hopes that the
stakes in 40 fields, while Royal Dutch Shell is market will have recovered sufficiently by 2025,
seeking a buyer for two fields and pipelines off when it aims to start commercial production at
Norway. The majors are scrambling to raise cash Bazhenov.
to settle debts, pay their dividends and continue
spending on core projects. But they will fetch far If you’d like to read more about the key events shaping
less for their assets now than they would have the former Soviet Union’s oil and gas sector then please
done six months ago. These divestments are ones click here for NewsBase’s FSUOGM Monitor.
of necessity.
Hopes remain for LNG import potential
If you’d like to read more about the key events shaping There is increasing pessimism over the appetite
Europe’s oil and gas sector then please click here for for new LNG export projects, but on the import
NewsBase’s EurOil Monitor. side, new opportunities are still being explored.
Indeed, importers may stand to benefit from a
Russian permafrost worries growing variety of options for sourcing their
An enormous fuel spill in northern Siberia has LNG supply, as well as low prices for the fuel.
highlighted the threat that climate change poses Under these circumstances, countries that are
to infrastructure in Russia’s Arctic zone. ramping up their LNG imports may find it easier
Permafrost covers around 65% of Russia and to attract foreign investors.
much of the older infrastructure in these areas is Last week, it was reported that ExxonMo-
not build to withstand this layer thawing. But this bil was considering investing in new LNG-to-
is exactly what is happening. Approximately 45% power projects in Vietnam. A statement from
of the producing oil and gas fields are located in the Vietnamese government suggested that
the highest hazard zone, according to the IPCC. there was potential to invest in a 4,000-MW
While the latest oil and gas developments in LNG-to-power plant in the northern port city of
Russia’s permafrost zone have been designed Haiphong, or a 3,000-MW plant in the Mekong
with climate change in mind, this is not the case Delta province of Long An.
with older projects, where structures could sink, The government added that the plants could
requiring costly repairs. Russian producers are use LNG imported from the US or elsewhere.

Week 24 17•June•2020 www. NEWSBASE .com P9