Oil find in the Yenisey Delta bodes well for Northern Sea Route

Newly confirmed oil reserves in the Yenisei River Delta may support development along Russia's Northern Sea Route

Rosnedra has confirmed a record oil find in the Yenisey River delta.

Russia’s state mineral extraction agency estimates that the Paykha fields may hold as much as 8.4 bbls where the Yenisey flows into the Kara Sea. Russia’s business daily Kommersant called the estimate one of the largest ever made for a Russian oil field.

Big Oil along Arctic river

Eduard Khudaynatov, president of license holder Neftegazholding has for years sought to develop the Payakha area. Khudaynatov had previously estimated reserves there at 4.2 bbls.

According to Kommersant, experts reacted with skepticism to the sudden major upgrade of the Payakha. Reportedly, only few exploration wells have been drilled in the area and seismic studies and data assessments remain sparse. The company has presented no new oil samples, the analysts say.

Neftegazholding has said that the Peschany and Irkinsky structures hold the lion’s share of the resources. These are two of the company’s four licenses in the area. The two fields together hold as much as 5.6 bbls, the new estimates suggest.

The Payakha fields are located along the eastern banks of the Yenisey, about 130 kilometers north of the port town of Dudinka.

A boost for Northern Sea Route

The oil find in the Yenisey Delta represents a sudden upgrade of the fields. It comes as the Russian government is struggling to add shipment volumes to the Northern Sea Route. President Vladimir Putin has requested a boost in Arctic shipping to an annual of 560 mbls by 2024. Russia plans to build new infrastructure and industry to meet the ambitious target.

The Payakha fields could play a key role.

Previously, the field was expected by 2024 to feed up to 35 mln bbls into the Northern Sea Route. That estimate might now be increased.

Furthermore, the Payakha resources could become a crucial component in Rosneft’s planned new Arctic oil pipeline. Khudaynatov is a former CEO of Rosneft. Russia’s state oil company plans to build a 600-kilometer pipeline from the Vankor fields in West Siberia to the coast of the Taymyr Peninsula with a 175 mln bls per year capacity. This could potentially include the Payakha resources.

Source: Barents Observer, Kommersant, Bloomberg