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Page added on June 20, 2015

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Russian Arctic Drilling To Be Postponed


Russia’s Energy Minister Alexander Novak said on Thursday that Arctic offshore drilling planned for this year will be postponed until 2016 or later.

“Drilling of wells (in Russia’s Arctic offshore territory) scheduled for 2015 will be delayed to the next year and possibly even longer,” Novak told Rossiya-24 state TV in an interview. He did not name specific projects.

Sources previously told Reuters that Russian state oil producer Rosneft will be forced to postpone drilling a second well in the Kara Sea for at least two more years, as a result of Western sanctions over the Ukraine crisis.


5 Comments on "Russian Arctic Drilling To Be Postponed"

  1. shortonoil on Sat, 20th Jun 2015 6:21 pm 

    Sanctions are a good political excuse; the real reason is that the arctic can not be drilled for $60/barrel. The long term price of oil is down, and highest cost production will be phased out first. It is happening in the tar sands, shale, Venezuela, and the arctic.

    This is simply a part of the now advanced depletion process.

  2. Apneaman on Sat, 20th Jun 2015 6:40 pm 

    The Shale Industry Could Be Swallowed By Its Own Debt

    ” The debt that fueled the U.S. shale boom now threatens to be its undoing.

    Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size.

    The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank.”

  3. JuanP on Sat, 20th Jun 2015 7:03 pm 

    I’ve been expecting these news for almost a year now, since prices started crushing. Russian Arctic oil has to be some of the most expensive oil available to extract in the whole world. As Short mentions above, Arctic oil, the Orinoco’s sour, the Brazilian pre salt, and some other plays are simply not viable at these prices.

    Not that it will make much difference to the big picture. This shouldn’t surprise any of the regulars here.

  4. Makati1 on Sun, 21st Jun 2015 12:18 am 

    The oil has been there for millions of years, and if it is never recovered, so what?

    Rigzone nor Reuters are a relaible source of real info. “‘Sources’ previously told Reuters…” More unsubstantiated info from the US MSM Ministry of Propaganda.

  5. shortonoil on Sun, 21st Jun 2015 7:52 am 

    “Drillers are devoting more revenue than ever to interest payments.”

    A significant portion of the world’s oil production can no longer command a price that can compensate for its full life cycle production cost. This has been going on for several years. The petroleum industry, having been the darling of the financial market for the last century and a half, has been able to increase its indebtedness even though it would not ever be able to pay it back. Wall Street has viewed the viability of the petroleum industry from one criteria, and one criteria only; Reserves, Reserves, Reserves. Like 99.9% of the population they never considered that depletion would eventually make many of those reserves economically unattractive.

    By analyzing the energy dynamics of petroleum production we came to that conclusion some time ago. Investors who continue to buy petroleum based on the number of barrels are likely to find they have purchased a financial disaster. Investing in petroleum is no longer a simple matter of counting barrels per dollar. It has become a far more complicated process. Investors who don’t understand the full implications of depletion had better stick with Toys 4 Totes.

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