Russia Ready to Bring China into Arctic Offshore

Russia's Rosneft is in talks with Chinese companies to allow them to take part in its offshore Arctic projects, the RIA news agency quoted Russian Deputy Energy Minister Anatoly Yanovsky as saying on Monday.

In September, China Oilfield Services Limited signed deals with Rosneft and Statoil to drill two exploration wells in the Sea of Okhotsk off the nation’s west coast. Rosneft president Igor Sechin said the agreements unlocked new cooperation potential for oil and gas exploration by industry leaders in Russia, Norway and China.

When asked about the talks between Rosneft and Chinese firms on their possible participation in Rosneft's offshore Arctic projects, Russian First Deputy Natural Resources Minister Denis Khramov said that partnership between Russia's Rosneft and U.S. firm ExxonMobil was long-term. "I don't think that currently... there is a search to replace Exxon," he told reporters.

Rosneft suspended drilling in Arctic Kara Sea in 2014 after U.S. ExxonMobil withdrew from the project because of Western sanctions over the Ukraine crisis.

In response to the actions and policies of the government of Russia with respect to Ukraine, in 2014 the United States imposed a series of progressively tighter sanctions on Russia. Among other measures, the sanctions limited Russian firms' access to U.S. capital markets, specifically targeting four Russian energy companies: Novatek, Rosneft, Gazprom Neft and Transneft. Additionally, sanctions prohibited the export to Russia of goods, services or technology in support of deepwater, Arctic offshore, or shale projects.

Russia was the world's largest producer of crude oil including lease condensate and the third-largest producer of petroleum and other liquids (after Saudi Arabia and the United States) in 2014, with average liquids production of 10.9 million barrels per day. Russia was also the second-largest producer of dry natural gas in 2013 (second to the United States), producing 22.1 trillion cubic feet.