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Russian company, Rosneft, starts works on Mega Arctic Oil Project.

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The Russian company, Rosneft is due to begin work on a Mega Arctic Oil Project also known as the Vostok Project. It is believed that there is a huge amount of oil and natural gas in the arctic region. CEO Igor Sechin announced that the Vostok project will be the backbone of the Russian oil industry, in November 2020, after a meeting with President Vladimir Putin.

Russia’s share of the Arctic contains around 7.3 billion tonnes of oil and 55 trillion cubic metres of natural gas. Fossil fuels make an important revenue stream for Russia. A third of Russian total exports is oil and gas, and this makes up nearly half of Russia’s state budget. Back in 2014 when crude oil prices went down from a $100 a barrel to $48 in the beginning of 2015, Russia’s revenue suffered a lot and the country was hit hard.

The Vostok project will stretch across the Russian arctic shores is estimated to cost around $170 billion over a decade. The project will require 400,000 workers, create 15 industrial towns and build 800km of new pipelines. Custom built ships adapted for the harsh winter weather, when the sea is covered by ice. The shipyard of Zvesda in the Russian far east already built one ice-class super oil tanker, which was delivered in June 2020. There are plans for 12. The Vostok project is expected to produce 30 million tonnes of oil by 2024. After the first phase, 50 million tonnes of oil need to be produced. This will need to be increased to 100 million tonnes.

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