The proximity to APR countries makes the Far Eastern region the leader in O&G export
The outcomes of Russia’s Far East development
The Far East accounts for 5% of oil and gas extraction volume in Russia. Owning to the proximity to ARP countries, its role in oil and gas sector becomes extremely important. The extraction volumes in the region are growing steadily. Rosneft contributes significantly to the sector upswing.
The largest fields under development are located on the shelf of the Sakhalin region, where Sakhalin-1, Sakhalin-2, and Sakhalin-3 projects are being implemented. Following the results of 2016, a total of 29.6bn cubic metres of gas and 18.3m tonnes of oil were produced. Besides, the shelves of the Sea of Okhotsk, as well as the arctic shelf are planned for the development.
Rossneft carries out exploration activities on the east arctic and the far eastern shelves. Their potential is enormous: 12bn tonnes of oil and condensate and 11tn cubic meter of gas. A total of 113 sites in the Russian East are licensed by Rosneft. Their overall hydrocarbon reserves are estimated at 3.3bn tonnes.
In the past 10 years, the company discovered 13 fields and 167 hydrocarbon deposits.
One more priority of the regional geological exploration is the research of natural resources in the northern part of the Sea of Japan. The works will be carried out on the Central-Tatar sea section. Its anticipated reserves are estimated at 270m tonnes of oil and 322bn cubic meters of gas.
In 2016, Rosneft extraction volumes exceeded 40m tonnes. Sakhalin-1 is one of the most important projects of the company in the Far East. Since its implementation, a total of 92mn tonnes of oil have been extracted. The project hit several records: 9 out of 10 deepest wells were drilled in Sakhalin-1. The country also benefits from the implementation of this project: according to estimates, Sakhalin-1 contributions to the budget by 2050 will amount to 6tn RUB.
To monetize the extracted gas, Rosneft plans to construct LNG plant with expected output of 5m tonnes annually.
The key project on the mainland is Taas-Yuryakh neftegazodobycha, located in the Sakha Republic (Yakutia). The recoverable reserves are estimated at 166m tonnes of oil and condensate and over 180bn cubic meters of gas. According to the plan, up to 5m tonnes of oil will be extracted here. That is why, Rosneft establishes an energy cluster in Yakutia. Among Rosneft partners are leading international investors, including BP, Indian Oil, Oil India, and Bharat Petroresources.
The Far East now is in need of oil refineries. Approximately half of oil products is imported from other regions. For this purpose, Rosneft invests in oil refinery. Over 60% of total oil refining capacities in the Far East are built by Rosneft.
Company’s main asset in this region is Komsomolsk Refinery. Its products are demanded in Russia and APR. The plant releases motor fuels of Euro5 eco class and fuel for vessels DMF. The company plans to modernise the plant and increase the processing depth up to 90%.
In 2012, Rosneft built a filling complex in Knevichi airport in Vladivostok. 3.5bn RUB were invested in the construction.
By 2016, the company increased its share on the regional oil market by 30%.
The investment in infrastructural projects of the Far East facilitates the access to APR markets. In the coming years, Rosneft will implement 2 more large-scale projects in the Far East.
The first one is the construction of VNHK petrochemical complex. Projected investment is about 800bn RUB. The complex will provide 50k work places.
The second project is implemented upon the order of the Russian President. The company builds a unique ship-building cluster. Its core is Zvezda plant – first Russian large-scale shipyard.
Rosneft is one of the leading investors in the Far East. In 2017, the company plans to allocate 1.3bn RUB for social programmes.