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Germany’s hydrogen aspirations six months ago. These divestments are ones of
Germany is aspiring to become a world leader in necessity.
hydrogen energy, after adopting a new strategy
that will set aside €7bn ($7.8bn) for its devel- If you’d like to read more about the key events shaping
opment. Its goal is to establish 5 GW of hydro- Europe’s oil and gas sector then please click here for
gen energy capacity by 2030 and to double this NewsBase’s EurOil Monitor.
amount by 2040.
Not everyone is happy with the plan, however. Russian permafrost worries
The gas industry has criticised the strategy for An enormous fuel spill in northern Siberia has
only favouring green hydrogen produced using highlighted the threat that climate change poses
renewables, and omitting blue hydrogen, derived to oil and gas infrastructure in Russia’s Arctic
from natural gas. Germany will need a strategy zone.
that is inclusive of a wide array of technologies in Permafrost covers around 65% of Russia and Aker BP and
order to produce the large quantities of hydrogen much of the older infrastructure in these areas is
it will need in the future and at the best price, the not build to withstand this layer thawing. But this Equinor have
industry argues. is exactly what is happening. Approximately 45% announced new
Norwegian operators Aker BP and Equinor of the producing oil and gas fields are located in
have announced new investments on Norway’s the highest hazard zone, according to the IPCC. investments
Continental Shelf (NCS), after the government While the latest oil and gas developments in
granted tax relief aimed at encouraging more Russia’s permafrost zone have been designed on Norway’s
projects to go ahead, despite the downturn. with climate change in mind, this is not the case
Equinor is preparing to connect its installa- with older projects, where structures could sink, Continental Shelf,
tions at the Gina Krog and Sleipner fields to the requiring costly repairs. Russian producers are after securing
onshore grid, in order to reduce their emissions. counting on Arctic fields to deliver extra pro-
Aker BP, meanwhile, is pushing ahead with duction that can offset declines at older deposits tax relief
the Hod redevelopment scheme – a project it further south. But the permafrost issue is likely
shelved back in April because of spending cuts. to drive up costs in the already high-cost region.
Norway’s offshore sector managed surprisingly In other news, Gazprom Neft is preparing to
well after the 2014 oil price crash, and looks set launch development of the Bazhenov tight oil
to persevere once more thanks to government formation in Western Siberia. The company
support. said this month it had sunk its first exploration
Undeterred by current market uncertainty, the and appraisal well into the formation. At current
oil majors are continuing with North Sea divest- prices, targeting unconventional oil in Russia
ments. ExxonMobil has revived plans to sell its is unfeasible. But Gazprom Neft hopes that the
UK North Sea business, which comprises stakes market will have recovered sufficiently by 2025,
in 40 fields, while Royal Dutch Shell is seeking when it aims to start commercial production at
a buyer for two fields and pipelines off Norway. Bazhenov.
The majors are scrambling to raise cash to settle
debts, pay their dividends and continue spend- If you’d like to read more about the key events shaping
ing on core projects. But they will fetch far less the former Soviet Union’s oil and gas sector then please
for their assets now than they would have done click here for NewsBase’s FSU OGM Monitor.

P8 www. NEWSBASE .com Week 24 18•June•2020