Lukoil teams up with Gazprom in Barents

June 17, 2014

Russia’s largest private oil company turns away from last year’s statement not to invest in Arctic offshore.

“If someone asked me to invest money in Arctic exploration and development, I wouldn’t give a kopeck,” said Lukoil’s Vice-president Leonid Fedun a year ago. He argued it is much cheaper to go for the still untapped onshore fields in Siberia than to drill the Arctic seabed.

Today, Lukoil CEO Vagit Alekperov told reporters at the World Petroleum Congress in Moscow that his company will set up a joint venture with Gazprom by the end of this year to explore parts of the Barents Sea, reports Reuters. Gazprom holds licenses like Dolginskoye and Prirazlomnoye in the Pechora Sea, the easternmost parts of the Russian sector in the Barents Sea. Further north, Gazprom has the license for the famous, but not economical profitable, Shtokman field.

Alekperov says Lukoil will have a 34 percent share of the new venture.

According to Russian law, only state-controlled companies have the right to get offshore licenses. Private companies, like Lukoil, can therefor only get access to petroleum resources in the Barents- or other Arctic Seas by teaming up with either Gazprom or Rosneft.

Copyright, Barents Observer, 2014.