Russian President And Rosneft Chief Discuss Massive Vostok Oil Project, Beyond The Polar Circle

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Russian President And Rosneft Chief Discuss Massive Vostok Oil Project, Beyond The Polar Circle

Map by Upstream Online. Click to see full-size image

On November 25th, Russian President Vladimir Putin met with Rosneft Oil Company Chief Executive Officer Igor Sechin.

The two spoke on several topics, including Vostok Oil in the north of the Krasnoyarsk Territory and the Zvezda Shipbuilding Complex in the Far East.

The Rosneft head thanked Putin for supporting the Vostok Oil project and for the investment benefits provided for the development of infrastructure.

The investment allowed to create an economically effective model and to start the practical implementation of the Project. Rosneft has pledged to deliver up to 30 million tonnes of oil to the Northern Sea Route by 2024.

Igor Sechin reported that exploration work is being conducted to prepare the resource portfolio of Vostok Oil. The priority sites for multiple well pads have been identified and they will number 150 at the initial stage of the project.

The survey and design stage of the project to build a pipeline, which will be 770 kilometres long, and a port in Sever Bay have been finished.

These projects will ensure the production, transportation and transhipment of up to 50 million tonnes of oil a year at the initial stage, and up to 100 million tonnes when the second stage is completed.

To meet the energy needs of the Project, Rosneft signed a contract with Inter RAO for a set of works to design and construct energy facilities, including energy centres with a total capacity of 2,500 GW, as well as more than 3,500 kilometres of power lines.

o ship oil produced by this project, an order for 10 Arc7 ice-class tankers have been placed at the Zvezda Shipbuilding Complex.

In total, there will be 50 vessels of different types servicing the Project, including tankers, gas carriers and supply vessels.

A long-term contract was signed on delivering up to 100 drilling units produced in Russia. These machines are equipped with modern geolocation and geosteering systems that can be bound to a specific drilling point.

They stand on a hydraulic platform, which ensures more precise drilling, greater drilling speed, higher efficiency and less risk of accidents. The drilling unit has a modular structure.

The provision of the equipment for the implementation of the project is also on-going.

In particular, the long-term supply contract with KAMAZ for the supply of machinery, special-purpose equipment and the establishment of specialised maintenance centres has been extended.

At the first stage, the Project will require 2,500 pieces of machinery, special-purpose equipment and cranes. Subsequently, the total quantity may increase to 6,000 units.

The possibility of procuring helicopters for the Vostok Oil project was discussed with Rostec. Considering the fleet the Company already has, around 50 new helicopters will be required at the first stage.

The Project is to create tens of thousands of new jobs. It will take over 400,000 people to develop the Vostok Oil fields, including 130,000 Rosneft personnel and contractors. Fifteen new towns will be built to accommodate workers who will stay there in shifts.

The implementation of the project creates additional incentives for the localization of high-tech equipment and ensures an increase in domestic demand for products of various industries, equivalent to 2% of GDP per year.

Experts, in turn, emphasize that the main demand for oil until 2025 will be provided by Asian countries, mainly China and India. In this sense, the Vostok Oil project was launched extremely timely.

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