The Future of Russia's Offshore Oil and Gas Industry

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Release Date: October 2006
Language: English
Volume: over 200 pages,
over 90 graphs, maps and tables
Price: 1550 euro

There are currently over 40 oil and gas projects in various stages on Russia's continental shelf. Depending on the source, estimates for Russia's annual offshore oil and gas production for 2010 range from 20 to 27 million tons (mt) of oil and from 25 to 40 billion cubic meters (bcm) of gas, for 2015 - from 40 to 52 mt of oil and from 90 to 140 bcm of gas.

The actual levels will depend on how successful the main offshore players will develop their current portfolio of projects, most of which are covered in the current study.

The Future of Russia's Offshore Oil and Gas Industry goes behind the headlines and surface analysis to present exactly what is being planned and where opportunities exist for foreign business.

The key issues that The Future of Russia's Offshore Oil and Gas Industry addresses are:

• What is known about the geology and resource base of the Russian offshore: how well has it been explored and what are the reserve data and estimates for each of Russia's seven seas?
• What is the status and development plans for each particular important offshore project?
• Does the current legislative and regulatory framework support or hamper investment into offshore projects? What are the expected developments?
• How big is the challenge related to technological and technical expertise and capability faced by the Russian companies in developing offshore projects? What is the demand for main types of infrastructure, equipment and vessels? Where are the critical shortages and how could they affect development of particular projects?
• What are the markets for oil and gas production from the offshore projects in the different seas?

A source of indispensable data for:

• oil and gas operators
• engineering and construction contractors
• oilfield service providers
• equipment and materials manufacturers
• shipping and transportation companies
• banks and financial institutions
• government and trade organizations

The Future of Russia's Offshore Oil and Gas Industry - table of contents
October 2006

• CONTENTS
• EXECUTIVE SUMMARY
• 1. THE IMPORTANCE OF THE CONTINENTAL SHELF IN AUGMENTING RUSSIA'S HYDROCARBON RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 OVERVIEW
• 1.1 Energy Strategy of the Russian Federation Necessitates Developing Russia's Continental Shelf
• 1.2 Offshore Potential
• 1.3 Strategy for Developing the Shelf
• 1.3.1 State strategy for exploring and developing the oil and gas potential of the continental shelf
• 1.3.2 Strategies of oil and gas companies
• 2. THE BUSINESS ENVIRONMENT FOR PROJECTS ON RUSSIA'S CONTINENTAL SHELF
• OVERVIEW
• 2.1 Economic Prerequisites to Developing Oil and Gas Resources of the Continental Shelf of the Russian Federation
• 2.2 Competitiveness of Offshore Projects
• 2.2.1 Prospects for commercial discoveries
• 2.2.2 Operating and capital costs
• 2.3 Markets for Russian Hydrocarbons
• 2.4 Statutory Regulation of Offshore Field Development
• 2.4.1 Offshore subsoil use
• 2.4.2 Procedures for general licensing
• 2.4.3 Procedures for production sharing agreements
• 2.5 Fiscal regime
• 2.6 Government Support for Construction and Exploitation of Offshore and Related Facilities
• 3. CHARACTERISTICS OF RUSSIA'S CONTINENTAL SHELF
• OVERVIEW
• 3.1 Geography, Natural and Climatic Conditions of the Russian Continental Shelf
• 3.2 Hydrocarbon Resource Base
• 3.2.1 Geological zoning of the shelf and the extent of study
• 3.2.2 Hydrocarbon reserves and resources
• 3.3 Priorities for Geological Study, 2006 2020
• 3.3.1 Shelves of the northern seas
• 3.3.2 Shelves of the Far East seas
• 3.3.3 Shelves of the southern seas
• 3.4 Offshore Subsoil Use Licensing
• 3.4.1 Licensing today
• 3.4.2 Priorities in licensing activities through 2020
• 4. CURRENT EXPLORATION AND PRODUCTION PROJECTS
• OVERVIEW
• 4.1 Sea of Okhotsk
• 4.1.1 Odoptu more (northern dome) field
• 4.1.2 Sakhalin 1
• 4.1.3 Sakhalin 2
• 4.2 The Barents Sea
• 4.2.1 Prirazlomnoye Field
• 4.3 The Baltic Sea
• 4.3.1 Kravtsovskoe Field (D 6)
• 5. PROMISING EXPLORATION AND PRODUCTION PROJECTS
• OVERVIEW
• 5.1 Sea of Okhotsk
• 5.1.1 Sakhalin 3
• 5.1.2 Sakhalin 4
• 5.1.3 Sakhalin 5
• 5.1.4 Sakhalin 6
• 5.1.5 Sakhalin 7
• 5.1.6 Magadan 1, 2, 3, 4
• 5.1.7 Zapadno Kamchatsky block
• 5.1.8 Khabarovsk 1, 3
• 5.2 Sea of Japan
• 5.2.1 Sakhalin 8, 9
• 5.2.2 Khabarovsk 2, 4
• 5.3 Bering Sea
• 5.3.1 Anadyr 1
• 5.3.2 Anadyr 2, 3
• 5.4 Kara Sea
• 5.4.1 Western shelf of the Yamal Peninsula
• 5.4.2 Ob and Taz bays
• 5.5 Barents Sea
• 5.5.1 Shtokmanovskoye field
• 5.5.2 Barents 1
• 5.5.3 Barents 2
• 5.5.4 Barents 3
• 5.5.5 Barents 4
• 5.5.6 Barents 5
• 5.5.7 Barents 6
• 5.5.8 Barents 7
• 5.6 Black Sea
• 5.6.1 Tuapse trough
• 5.6.2 Shatsky ridge
• 5.7 Sea of Azov
• 5.7.1 Temryuksko Akhtarsky block
• 5.8 Caspian Sea
• 5.8.1 Severny block
• 5.8.2 Tsentralny Block
• 5.8.3 Yalamo Samursky block
• 5.8.4 Severo Kaspiysky block
• 5.8.5 Kurmangazy structure
• 5.8.6 Inchkhe more field
• 5.8.7 Derbentsky and Dimitrovsky blocks
• 5.8.8 Izberbashsky and Sulaksky blocks
• 5.8.9 Shelf of the Republic of Kalmykia
• 6. LNG PROJECTS ON RUSSIA'S CONTINENTAL SHELF
• 6.1 Liquefied Natural Gas around the World
• 6.2 Likely Niches for Russia in LNG Sales
• 6.3 Onshore and Offshore LNG Plant Projects
• 6.3.1 LNG production within the Sakhalin 2 project
• 6.3.2 LNG production within the Shtokmanovskoye project
• 6.3.3 LNG plant projects onshore
• 7. EQUIPMENT AND TECHNOLOGY FOR RUSSIA'S OFFSHORE FIELDS
• OVERVIEW
• 7.1 Essential Equipment and Technology for Exploring and Developing Russia's Continental Shelf
• 7.1.1 Pressing technical and technological issues
• 7.1.2 Geophysical surveying and exploration
• 7.1.3 Drilling wells
• 7.1.4 Outfitting offshore fields
• 7.1.5 Transporting oil and gas
• 7.1.6 Assessing demand for drilling rigs and production platforms
• 7.2 Russian Market for Offshore Drilling Rigs and Production Platforms
• 7.2.1 Historical overview
• 7.2.2 Offshore drilling rigs and production platforms
• 7.2.3 Russian producers of offshore units
• AFTERWORD
• Appendix 1
• Appendix 2
• Appendix 3

Tables

• Table 1.1 Moderate and (optimistic) forecasts for liquid hydrocarbon production in Russia through 2030
• Table 1.2 Factors influencing technical accessibility of hydrocarbon resources in offshore Russia
• Table 1.3 Distribution of oil resources in offshore Russia by technical accessibility and forecasted profitability (million tons)
• Table 1.4 Distribution of free gas resources in offshore Russia by technical accessibility and forecasted profitability (billion cubic meters)
• Table 2.1 Commercial success indices for offshore areas of selected countries, 1991 through 2000
• Table 2.2 Average size of discoveries at commercial fields, 1991 2000
• Table 2.3 Country ranking by anticipated size of reserves, 2000
• Table 2.4 Costs to discover and develop a field by country
• Table 2.5 Anticipated per unit cost for geological exploration by country
• Table 2.6 Centers of growth in demand for hydrocarbons
• Table 2.7 Coefficients for calculating differentiated rates for the mineral extraction tax
• Table 3.1 Surface areas of Russia's seas
• Table 3.2 Shallow water areas of Russian seas, thou. sq km
• Table 3.3 Extent of geological exploration in Russia's offshore as of January 1, 2005
• Table 3.4 Characteristics of offshore fields in the Sea of Okhotsk
• Table 3.5 Characteristics of offshore fields in the Barents Sea (including the Pechora Sea)
• Table 3.6 Recoverable initial combined hydrocarbon resources in Russian marine territories as of the beginning of 2005
• Table 3.7 Distribution of initial combined hydrocarbon resources at various depths in the Sea of Okhotsk
• Table 3.8 Recoverable reserves at fields on the shelf of the Sea of Okhotsk as of the beginning of 2005
• Table 3.9. Forecast of fields on the shelf of the Sea of Okhotsk containing recoverable reserves exceeding 10 million tons of oil equivalent
• Table 3.10 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Bering Sea
• Table 3.11 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Chukchi Sea
• Table 3.12 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the East Siberian Sea
• Table 3.13 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Laptev Sea
• Table 3.14 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Kara Sea
• Table 3.15 Recoverable reserves of major fields on the shelf of the Kara Sea as of the beginning of 2005
• Table 3.16 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Barents Sea
• Table 3.17 Recoverable reserves of major fields on the shelf of the Russian sector of the Barents Sea as of the beginning of 2005
• Table 3.18 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Black Sea
• Table 3.19 Distribution of initial combined hydrocarbon resources at various depths in the Russian sector of the Caspian Sea
• Table 3.20 Recoverable reserves of major fields on the shelf of the Russian sector of the Caspian Sea as of the beginning of 2005
• Table 3.21 Current licenses for shelf operations in the Barents and Kara seas
• Table 3.22 Current licenses for shelf operations in the Far East seas
• Table 3.23 Current licenses for shelf operations in the Sea of Azov and the Black and Caspian seas
• Table 3.24 Characteristics of subsoil areas licensed on the Russian continental shelf as of July 1, 2005
• Table 3.25 Required 2D offshore seismic surveys
• Table 3.26 Blocks proposed for licensing on the shelf of the Barents Sea through 2010
• Table 3.27 Blocks proposed for licensing on the shelves of the Far East seas through 2010
• Table 3.28 Offshore blocks offered for geological study
• Table 4.1 Oil production on the Russian shelf, thous. tons
• Table 4.2 Capital investments in projects on the Russian shelf
• Table 4.3 Oil production on the shelf of Sakhalin Island, thous. tons
• Table 4.4 Recoverable reserves of the Sakhalin 1 project as of the beginning of 2005
• Table 5.1 Shelf areas scheduled for allotment in 2006
• Table 5.2 Forecast of oil and gas production in the Sea of Okhotsk, 2010 2020
• Table 5.3 Structures of the Sakhalin 3, 4, 5, 6 projects with forecasted IRR > 20 percent
• Table 5.4 Structures of the Sakhalin 3 project (Sea of Okhotsk) with forecasted IRR > 20 percent
• Table 5.5 Structures of the Sakhalin 4 project (Sea of Okhotsk) with forecasted IRR > 20 percent
• Table 5.6 Structures of the Sakhalin 5 project (Sea of Okhotsk) with forecasted IRR > 20 percent
• Table 5.7 Structures of the Sakhalin 6 project (Sea of Okhotsk) with forecasted IRR > 20 percent
• Table 5.8 Forecast of oil and gas production in the Kara Sea, 2010 2020
• Table 5.9 Forecast of oil and gas production in the Barents Sea, 2010 2020
• Table 5.10 Forecast of oil and gas production in the Russian sector of the Caspian Sea, 2010 2020
• Table 6.1 Increases in LNG imports, 1965 2004, bcm
• Table 7.1 Equipment and technology for exploring and developing Russia's offshore
• Table 7.2 Russian offshore productions units
• Table 7.3 Demand for production platforms for offshore projects through 2030
• Table 7.4 Demand for tankers for offshore projects through 2030
• Table 7.5 Demand for vessels to support oil and gas production in the Sea of Okhotsk through 2030
• Table 7.6 Demand for LNG plants and loading terminals in the Barents Sea and Sea of Okhotsk through 2030
• Table 7.7 Demand for vessels to transport LNG in the Barents Sea and Sea of Okhotsk, units
• Table 7.8 Construction modernization of offshore equipment at Russian facilities, 1997 2008
• Table 7.9 Distribution of the Soviet drilling fleet (excluding Russia) today
• Table 7.10 Russia's offshore drilling and production fleet, as of mid 2006
• Table 7.11 Equipment manufactured by Uralmash Burovoye Oborudovaniye (Integra)
• Table 7.12 Equipment manufactured by Uralmash Burovoye Oborudovaniye for semisubmersible drilling platforms (Integra)

Maps

• Map 3.1. Seas adjacent to the Russian Federation
• Map 3.2. Primary oil and gas bearing provinces and basins of the Russian shelf
• Map 3.3. Fields and prospective structures of the Sakhalin shelf (the Seas of Okhotsk and Japan)
• Map 3.4. Fields and prospective structures in the Russian sector of the Barents Sea shelf
• Map 3.5. Fields and prospective structures in the Russian sector of the Baltic Sea shelf
• Map 3.6. Fields and prospective structures in the Russian sector of the Caspian Sea shelf
• Map 3.7. Geological activities on the shelves of the Barents and Kara seas
• Map 3.8. Geological activities on the shelf of the Laptev Sea
• Map 3.9. Geological activities on the shelf of the Bering Sea
• Map 3.10. Geological activities on the shelves of the southern seas
• Map 3.11. Subsoil use licensing on the shelves of the Barents and Kara seas
• Map 3.12. Subsoil use licensing on the shelf of the Far East seas
• Map 3.13. Subsoil use licensing on the shelves of the Black and Caspian seas and the Sea of Azov
• Map 3.14. License blocks in the Barents Sea
• Map 3.15. License blocks in the Sea of Okhotsk
• Map 4.1. Odoptu more (northern dome) field, Sakhalin 1, 2 projects (Sea of Okhotsk)
• Map 4.2. Sakhalin 1 project, phase 1 field construction objects (Sea of Okhotsk)
• Map 4.3. Transportation infrastructure for Sakhalin 1 projects (Sea of Okhotsk)
• Map 4.4. Sakhalin 2 project elements and transportation infrastructure (Sea of Okhotsk)
• Map 4.5. Prirazlomnoye project elements and transportation infrastructure (Barents Sea)
• Map 4.6. Kravtsovskoe project elements and transportation infrastructure (Baltic Sea) . . . . .109 5.1. Prospective projects on the shelves of the Seas of Okhotsk and Japan
• Map 5.2. Sakhalin 3, 4, 5 projects (Sea of Okhotsk)
• Map 5.3. Sakhalin 6, 7, 8, 9 projects (Sea of Okhotsk and Sea of Japan)
• Map 5.4. Magadan 1, 2, 3, 4 projects (Sea of Okhotsk)
• Map 5.5. Zapadno Kamchatsky project (Sea of Okhotsk)
• Map 5.6. Anadyr 1, 2, 3 projects (Bering Sea)
• Map 5.7. Western shelf of the Yamal Peninsula (Kara Sea)
• Map 5.8. Fields of the Ob and Taz bays (Kara Sea)
• Map 5.9. Field infrastructure and transportation plan for developing the Shtokmanovskoye field (Barents Sea)
• Map 5.10. Barents 1, 2, 3, 4 and 5 projects (Barents Sea)
• Map 5.11. Projects on the shelf of the Black Sea
• Map 5.12. Projects on the shelf in the Russian sector of the Caspian Sea
• Map 6.1. Options for LNG plants on the Yamal Peninsula
• Map 7.1. Main shipyards serving the offshore industry

Figures

• Figure 1.1. Distribution of oil resources by onshore and offshore regions of Russia
• Figure 1.2. Oil production forecast through 2020
• Figure 1.3. Gas production forecast through 2020
• Figure 2.1. Potential markets for Russian offshore hydrocarbons
• Figure 2.2. Competitors to Russia's offshore hydrocarbons by potential markets
• Figure 3.1. Seismic exploration maturity of the Russian continental shelf
• Figure 6.1. Potential LNG transportation routes from Russia

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