EPRSauthor By / July 8, 2014

Russia’s Prirazlomnaya oil rig in the Arctic

Annual production from the Prirazlomnaya offshore oil field is estimated to amount to 6.6 million tonnes per year. Russia’s Arctic…

© Nightman1965 / Fotolia

Annual production from the Prirazlomnaya offshore oil field is estimated to amount to 6.6 million tonnes per year. Russia’s Arctic policy strongly supports further such developments, but environmental NGOs fear the result will be an ecological catastrophe from an oil spill. The European Parliament believes that increasing the use of natural resources must be done in a manner taking full environmental responsibility for the fragile Arctic environment.

General background

Recent reports show that the Arctic, with 6% of the Earth’s surface area, holds 15% of the world’s known oil and gas reserves. Much of the Arctic remains unexplored; geologists expect much more petroleum will be found as exploration continues. Up to now, some 130 billion barrels of oil and 1 500 trillion cubic feet of gas have been discovered in this region. Most of the Arctic’s known resources are in Russia. In total, Russia holds 95 billion barrels of oil and 1 390 trillion cubic feet of gas. This gives Russia a commanding 72% share of the oil and 91% of the gas that have been found across the Arctic, both on land and offshore. The Russian offshore Arctic sector is located in the Barents Sea (including the Pechora Sea). The Prirazlomnaya oil field, discovered in 1989, is in the Pechora Sea, 60 kilometres from the coastline. The sea is 19-20 metres deep at the field. Reserves at Prirazlomnaya are estimated at about 72 million tonnes of oil, enabling an annual production level of 6.6 million tonnes. Oil production by Gazprom from the Prirazlomnaya field started in December 2013.

Russia’s Artic policy

The exploitation of the Prirazlomnaya oil field follows both the spirit and the line drawn in Russia’s Artic policy. The Russian government adopted in September 2008 a policy document which emphasises the Arctic’s importance to the national economy. The ultimate objective of state policy is to transform the Arctic into “Russia’s foremost strategic base for natural resources” by 2020. The Russian authorities consider the region crucially important for Russia’s future wealth. Russia’s effort to define the outer limits of the continental shelf in the Arctic Ocean region is defined as a priority task, to be accomplished by 2015 within the framework of international law. On 12 May 2009, then-President Dmitri Medvedev approved the Russian national security strategy for the period up to 2020, confirming the important role of energy security. The strategy asserts that in the long-term perspective, Russia’s attention in the field of international policy will be focused on access to energy reserves, including those on the continental shelf in the Barents Sea and other parts of the Arctic.

Prirazlomnaya controversy

Oil spill from the oil rig
© Nightman1965 / Fotolia

According to reports from environmental NGOs such as Greenpeace and the World Wildlife Fund, the Arctic oil rig Prirazlomnaya, owned by Gazprom, is not adequately prepared to deal with the harsh conditions in the Pechora Sea and prevent oil spills. The specific characteristics of the Arctic Ocean are that it has only two narrow entrances – one by Iceland and the other by Alaska (which means there is little mixing with other seas) – and the cold (because of the low temperatures any spill would take much more time to be absorbed). This means that any oil spill would not disperse in the very cold waters. Moreover, such pollution could be catastrophic and entirely destabilise the Arctic’s ecosystem. In addition, there are for now no adequate and reliable technologies capable of effectively removing the oil after a spill in the Arctic.

On 18 September 2013, Greenpeace’s Dutch-registered vessel “Arctic Sunrise” circled the Prirazlomnaya oil rig. In response, the Russian Coast Guard seized control of the ship and detained 30 Greenpeace activists

who were charged by the Russian government with piracy. On 21 October 2013, the Netherlands introduced a request to the International Tribunal for the Law of the Sea (ITLOS). Russia rejected participation in arbitration under the Law of the Sea Convention and did not participate in the proceedings. On 22 November 2013, ITLOS ordered the release of Greenpeace ship and crew. Russia formally dropped criminal charges against Greenpeace activists on Christmas Day 2013, after the Russian parliament adopted an amnesty decree marking the 20th anniversary of the country’s constitution. On 17 March 2014, lawyers for the 30 Greenpeace activists asked the European Court of Human Rights to declare illegal their three month detention and the Russian seizure of the Greenpeace ship.

According to the Barents Observer, Gazprom is preparing to construct another two oil platforms in the Pechora Sea.

EU Artic policy

As far as Russia and the Prirazlomnaya issue are concerned, the EU has sought to enhance collaboration in order to establish a balance between preserving the Arctic and the sustainable use of its resources. In this context, hydrocarbon exploration and exploitation is a key issue for discussion with Russia as stated in the 2013 Roadmap on EU-Russia Energy Cooperation until 2050. EU policy on Arctic issues insists on the fact that the EU has to work with Arctic partners and the private sector to develop environmentally friendly, low-risk technologies that could be used by the extractive industries in their increasing mining and oil extraction activities in the region. The EU’s application for permanent observership at the Arctic Council was supported by Russia but frozen by Canada. The European Commission is, along with Russia, Denmark, Finland, Iceland, Norway and Sweden, a member of the Barents Euro-Arctic Council (BEAC), established in 1993. The development of the European Arctic regions is also part of the EU’s revised Northern Dimension policy which covers the EU, Russia, Iceland and Norway. The Ukraine crisis is likely to push the EU to reduce its dependence on Russian supplies and seek to diversify and expand its sources of energy supplies, which may have a knock-on effect on Russia’s Arctic production plans.

EU position on Prirazlomnaya

On 25 November 2013, in a written joint answer on behalf of the Commission to European Parliament (EP) questions, High Representative/Vice-President Catherine Ashton stated that the case of the Greenpeace activists was being dealt with by the relevant Member States’ delegations in Moscow as a consular matter, and for this reason the EU abstained from public statements. She noted with interest the Netherlands’ request at the ITLOS and Russia’s readiness to seek a mutually acceptable solution to the situation. On 23 October 2013, the EP debated the case of the 30 Greenpeace activists. Russia’s charges against the activists were considered disproportionate, MEPs called on the Council and Commission to take action to ensure the release of the detainees, while the arbitration procedure initiated by the Netherlands was welcomed.

In its most recent resolution of 12 March 2014 on the EU strategy for the Arctic, the EP highlighted the economic opportunities and the variety of industries in the Arctic such as gas, oil and offshore operations but stressed that the increasing use of natural resources must take full environmental responsibility for the fragile Arctic environment. Finally, for the EP, Arctic waters require special attention to ensure the environmental protection of the Arctic in relation to any offshore oil and gas operations.

Think-tanks’ views

A recent study (2014) from the US Congressional Research Service underlines that the continuing reduction in Arctic Sea ice has led to increased human activities in the Arctic. It is therefore more likely that the exploitation of Russia’s Arctic oil and gas reserves will continue and intensify. An expert from the Centre for European and North Atlantic Affairs (CENAA) confirms in a report (2013) that the Arctic is clearly vital to Russia’s relevance in world affairs; natural resources are one of the major forces driving Russian policy as they are viewed as the basis for the economic development, and determine its geopolitical influence and power. Finally, two researchers have written in a document published by the Carnegie Endowment for International Peace that the Arctic could present an opportunity for Russia to cooperate with the other Arctic countries and oil companies because of the heavy cost of oil and gas exploitation in the region; the Moscow Times relates that global majors including ExxonMobil, Eni and Statoil have agreed on deals with Russia’s oil producer, Rosneft, to enter the region before the 2020s.

Related Articles
  • The author says the Arctic oil rig Prirazlomnaya is owned by Gazprom with its key financing partner Shell; however this is false — Shell has no financial stake in the oil rig Prirazlomnaya and this should be corrected.

Leave a Reply

%d bloggers like this: