Russia halts gas project in Arctic

The ambitious Shtokman gas production scheme in the Barents Sea, described by the Russian president as recently as May as having "global significance", was officially halted this week.

"All parties have come to the conclusion that the financing is too high to be able to do it for the time being," said Vsevolod Cherepanov, head of Gazprom's production department.

The move became more likely last week when Gazprom's Norwegian partner, Statoil, handed back its 24% stake and wrote off $336-million, saying Shtokman could not be commercially justified.

Gazprom said it was still talking to Shell and other foreign investors about taking over the Statoil stake.

Oil and gas exploration in the far north is controversial given its unspoilt environment and Greenpeace took its first direct action against Gazprom last week by boarding a floating platform in the Arctic.

Land of milk and honey
Ben Ayliffe, a polar campaigner at the green group, said the scrapping of Shtokman sent a warning to investors that the Arctic was not "the land of milk and honey" the oil and gas industry claimed.

"The likes of Cairn, Shell and Gazprom have spent billions in the Arctic, but come out with nothing to show for it. The technical challenges of operating in such conditions mean hydrocarbon development in the far north is a huge risk," Ayliffe said.

But Paul Stevens, an energy expert at international affairs think-tank Chatham House, said the Shtokman move was not cause for celebration. "I worry that expectations of a shale revolution in Europe is undermining investment decisions. It is okay if Europe is soon awash with cheap shale supplies, but if it turns out to be hype then it could be too late to invest in alternative projects. That would have implications for [gas] prices," he said.

The decision to shelve the Shtokman project represents a significant blow to the Kremlin's economic – and possibly political – strategy. Critics have often accused Russia of using energy as a foreign policy tool and it no doubt believed that becoming a significant provider of gas to the US would give it political leverage.

Shtokman is one of the world's largest gas fields, but it has been the subject of endless political and commercial wrangling since it was discovered almost a quarter of a century ago. With reserves estimated at 3.8-trillion cubic metres, it was considered a major opportunity as gas prices began to soar in the early part of the new century. Gazprom insisted this week that it was still possible that Shtokman could see the light of day, pointing out that Total of France remained a stakeholder.  – ©Guardian News & Media 2012

Advertisting

ANC and the state step back from taking action against...

Despite alleged abuses of power and people’s trust, the ANC appears to have abandoned plans to reform the controversial Ingonyama Trust Board

Mkhwebane moves to halt ‘grossly unfair’ impeachment process

Mkhwebane moves to halt ‘grossly unfair’ impeachment process

Chaos theory: How Jürgen Klopp has harnessed the unpredictable

The Liverpool manager has his side playing unstoppable football but it’s the attention to detail off the field that has bred the success

Miners speak out against Sibanye

Not a year into buying Lonmin, Sibanye is accused of mistreating the mineworkers who were injured eight years ago during the Marikana massacre. But the platinum giant says it is a miscommunication. Athandiwe Saba and Paul Botes visit Marikana to find out the truth
Advertising

Press Releases

Wellcome Trust award goes to UKZN mental health champion

Dr Andr? J van Rensburg, a senior researcher in UKZN's Centre for Rural Health, received the Wellcome Trust Discretionary Award.

MTN gears up to deliver improved customer service

On 28 January, the first batch of MTN contract customers will be migrated onto the new customer service platform.

Request for expression of interest on analysis of quality and outcome indicators for regional and district hospitals in Lesotho

Introduction The Ministry of Health of Lesotho with the support of the World Bank funded Nutrition and Health Systems Strengthening...

MiX Telematics enhances in-vehicle video camera solution

The company has launched the gold MiX Vision Bureau Service, which includes driver-coaching tools to ensure risky driver behaviour can be addressed proactively and efficiently.

Boosting safety for cargo and drivers

The use of a telematics system for fleet vehicles has proved to be an important tool in helping to drive down costs and improve efficiency, says MiX Telematics Africa.

Silencing the guns and firearms amnesty

Silencing the guns and firearms amnesty

Gender-based violence is an affront to our humanity

Gender-based violence is an affront to our humanity

UK-Africa investment summit 2020: Think Africa Invest SA

UK-Africa investment summit 2020: Think Africa Invest SA