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Arctic oil exploration will cost up to $400 billion – Rosneft chief

Published time: June 20, 2012 15:47
Edited time: June 20, 2012 19:47
(RIA Novosti / Sergey Guneev)

(RIA Novosti / Sergey Guneev)

Total cost of the operations in Russia’s arctic shelf might reach $400 billion, which is “comparable to the cost of space exploration”, Igor Sechin, President of Russia’s state major Rosneft, revealed.

"According to a preliminary estimate, total operations in the Arctic might require between $250 and $400 billion investment," Sechin said during the annual shareholders meeting on Wednesday.

For example, the first stage of exploration for projects with Exxon Mobil will cost about $3.2 billion. "Eni will pay around $1 billion. Geological exploration for projects with Statoil has the same estimate," Sechin added.

Rosneft has recently completed three major deals on the Arctic shelf development, with Italy’s ENI, Norway’s Statoil, and the America’s ExxonMobil. Under the terms of the agreement the foreign companies get a minor stake of near 30% in the joint projects and pay up-front investment costs in exchange for stake in their assets.

Sechin pointed out Rosneft is interested in cooperation with Russian companies Lukoil and TNK-BP on Arctic exploration. "They [Lukoil] have assets interesting to Rosneft, and TNK-BP also has something," Sechin said

In April Rosneft proposed Russian oil majors TNK-BP, Lukoil, Bashneft and Surgutneftegaz jointly develop as much as twelve shelf fields. Both Lukoil and TNK-BP said they are interested in the projects.

“We confirmed our interest and started negotiation with Rosneft,” Vagit Alikperov, the head of Lukoil said earlier. “We are ready to offer Rosneft a stake in our projects. For example, we have a lot of blocks in West Africa.”

Foreign as well as Russian companies rushed to seek deals on the Arctic development after then Russian PM Vladimir Putin proposed to lift all export duties for new projects in the Аrctic shelf. Putin said the Arctic projects would attract up to $500 billion in the next 30 years and provide foreign technologies and new jobs.