Page 5 - FSUOGM Week 09 2022

FSUOGM COMMENTARY FSUOGM

Domanik limestone oil formation, where the LNG-2 plant, while German company Winter-
pair are currently undertaking a three-year pilot shall Dea is helping Gazprom develop deep gas
programme. reservoirs at the Urengoi field in west Siberia.
OMV holds a stake in Gazprom's Yuzhno-Russ-
Shell next in line koye gas field, also in Siberia.
Next in line was Shell, which said late on Feb- TotalEnergies has not announced a plan to
ruary 28 it was leaving its joint ventures with withdraw. But it has said it will not invest in any
Gazprom. It is partnered with the Russian gas additonal projects. Likewise OMV has given up
giant at the 10mn tonne per year (tpy) Sakha- on plans to expand its interests at the Urengoi
lin-2 LNG plant in the Russian Far East, and with field, but appears to have no intention to with-
Gazprom's oil arm Gazprom Neft at the Salym draw from Yuzhno-Russkoye. Wintershall Dea
Petroleum oil development in west Siberia. has ruled out additional investments in the Rus-
Shell played an integral role in jump-starting sian pressure.
Russia's LNG sector. It was the original operator Severe Western sanctions against Russia
of the Sakhalin-2 LNG terminal, the country's imposed in response to the conflict in Ukraine
first, with Gazprom only replacing it in the role could make continued operations for IOCs in
when the project was midway through develop- the country difficult, and the companies are
ment. Gazprom had hoped for the company to likely to face sustained pressure from govern-
play a role in its planned Baltic LNG terminal, ments and NGOs to leave .
but the partnership fell through in 2019 after The next question is which, if any foreign
Gazprom brought on board a partner at the pro- investors will replace them. Indian compa-
ject belonging to sanctioned Russian oligarch nies are actively involved in Russia’s oil and gas
Arkady Rotenburg. industry, and New Delhi has been more reserved
in its criticism of Russia’s invasion of Ukraine.
Exit ExxonMobil But Chinese state companies seem more likely
Then came ExxonMobil's turn. The company candidates.
said on March 1 it was departing the Sakhalin-1 Like Russia, China’s relationship with the
project, where it has served as operator since the West has grown more adversarial, albeit to a
mid-1990s. lesser extent, over its anti-democratic prac-
Sakhalin-1, comprising the Chayvo, Odoptu and tices, alleged genocide of Uyghurs and inten-
Arkutun-Dagi fields off Sakhalin Island, cur- tions towards Hong Kong and Taiwan, among
rently flow around 230,000 bpd of oil and over other issues. Russia and China have been keen
12 bcm per year. The project has been hailed as to expand both their economic and political
one of Russia's most successful foreign partner- ties, as was evidenced during Russian President
ships. Besides ExxonMobil, other shareholders Vladimir Putin’s meeting in Beijing with Chinese
include Rosneft, ONGC Videsh and SODECO. counterpart Xi Jinping in February. Among the
ExxonMobil added it would not be investing in many deals signed during Putin’s trip, Gazprom
any more projects in Russia. and CNPC agreed on a new gas deal covering
10bn cubic metres of annual supply.
What next? When relations with the West first col-
With BP, Equinor, ExxonMobil and Shell now lapsed in 2014, in the aftermath of annexation
set to go, pressure will build on those IOCs that of Crimea, Putin proudly declared that Russia
still have a significant presence in Russia. First would make a pivot towards Asia. The success
and foremost is France’s TotalEnergies, which of this strategy lies in balancing out Western and
holds a 16% interest in Russia’s largest gas pro- Chinese interests. Isolated from Europe, Russia
ducer Novatek. The company is also an inves- may find itself comfortably dependent on China,
tor in Novatek’s 17mn tpy Yamal LNG plant, which will be sure to exploit its junior partner’s
launched in late 2017, and its 20mn tpy Arctic weakened state where it can. ™

Week 09 02•March•2022 www. NEWSBASE .com P5