Page 13 - AsianOil Week 24

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

Week 24 18•June•2020 www. NEWSBASE .com P13