First and Last: Russia’s Arctic Platform, a Unique Experience
This is an abridged version. The full text is avaiable to subscribers to The Russian Energy weekly.Gazprom is finishing the construction of Russia’s first stationary platform for oil production in arctic waters. The Prirazlomnaya has absorbed so much cash that its exploitation can become economical only if no taxes are paid to the government. New subsea technologies in the meanwhile are making such cumbersome solutions redundant.
Cast in Concrete
After almost twenty years of delays, the first offshore oil project in the Pechora Sea is approaching the inauguration date. The Prirazlomnaya platform is to be tugged to the location 60 km off the shore near the Varandei village inn July or August and begin drilling the first three wells (one for production, one for injection and one for waste disposal).
Russia’s first stationary arctic platform is an awesome affair. Its weight, including ballast, is more than 500,000 tonnes. The concrete caisson walls are five-meters thick, covered with two layers of steel and a layer of stainless steel. The metal sheets will be protected from corrosion by electric current.
CEO of Gazprom Neft Shelf (GDS) Alexander Mandel speaks enthusiastically about the technical characteristics of the platform but avoids quoting its cost. ‘I think that the project is going to absorb, including the platform and drilling expenses (which account for 40 to 50 percent of the budget), around $4 billion,’ he says.
The field’s recoverable reserves in categories C1+C2 are estimated at 72 mln t, and the IRR of the project will not be higher that a meager 3-4%, as GDS believes. Considering the inflation rate, the final result is in negative figures. It remains to be seen whether the experience Gazprom has accumulated in this project can help the company handle other offshore ventures.
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