Rosneft has started production drilling on the Payakhskoye field on the Taimyr Peninsula. The Russian energy company plans to drill about 80 wells there by the end of this year.
The Payakhskoye field is part of Rosneft’s strategic Vostok Oil project. Its license fund consists of 52 subsoil plots, within which 13 fields have been discovered, four of which have already been put into development using the latest technologies.
The project’s resource base of 6.2 billion tonnes of oil has been confirmed by extensive exploration work, detailed reports from world-class experts and international auditors.
These resources are comparable to the largest oil provinces in the Middle East or to American shale formations and are also on a par with another legendary Russian field, the Samotlor field in the autonomous region of Khanty-Mansi (7.1 billion tons).
The development of the Samotlor field enabled the Soviet Union to become one of the leaders of the international hydrocarbon market. But the era of this West Siberian oil province is coming to an end, while the Taimyr era is just beginning. According to Rosneft’s plan, the production of the project will reach 115 million tons by 2033.
With the drop in investment in oil and gas that the world has experienced in recent years, Vostok Oil is the only project capable of having a stabilizing effect on the hydrocarbon markets.
In the past five years alone, total upstream capital spending by the largest energy companies has fallen 29%, and total investment in the oil and gas industry has fallen 26% over the past decade. At the same time, according to JP Morgan, global energy demand is expected to exceed supply by 20% as emerging economies grow rapidly and strive to improve living standards and quality of life. To eliminate the oil deficit alone by 2030, the world needs an additional investment of $400 billion. In a context of reduced investment, analysts predict that this level will probably not be reached and that the oil deficit could persist for a long time.
The fact that Rosneft is launching a major energy project against the backdrop of growing external economic pressure shows the enormous sustainability of the project and the company as a whole.
Vostok Oil’s unique and sustainable business model is a key factor contributing to the investment attractiveness of the project. Rosneft has already received opinions from leading international experts confirming the resource base, development technologies and economics of the project. Major international investment banks highly value Vostok Oil: JPMorgan – $114 billion, Raiffeisen – $90 billion, Citi – $86 billion, Goldman Sachs – $85 billion, Bank of America – $70 billion of dollars.
The scope of the project includes a whole complex of oil, airport and energy transport infrastructure, including the largest oil transshipment terminal in the country on the Northern Sea Route with a capacity of 100 million tonnes per year, 7,000 km of pipelines, 3.5 GW of new capacity, helipads, etc.
Rosneft has already started construction of the unique port Bukhta Sever in Yenisei Bay in the west of the Taimyr Peninsula. The port infrastructure includes three loading docks and two oil loading docks with a total length of almost 1.3 km, the largest receiving and loading station in Russia with 27 tanks of 30,000 cubic meters each, and technological and supporting infrastructure.
Bukhta Sever Oil Loading Terminal is a strategically important facility, providing transshipment of oil from Vostok Oil fields via the Northern Sea Route. It will become the largest oil loading terminal in Russia with an oil receiving and storage fleet. By 2030, it will have 102 tanks.
The supply of raw materials from the fields to all international markets, especially the Asia-Pacific region, is a logistical advantage of the Vostok Oil project.
The oil will be transported to the port of Bukhta Sever via the pipeline system under construction from the fields of the Payakh and Vankor clusters. The total length of the main oil pipelines will be about 770 km. Using the infrastructure of the first phase, the volume of oil transshipment through the marine terminal of Bukhta Sever port can reach 30 million tons per year, with a gradual progression to reach a total transshipment volume of 100 million tons. in 2030.
Clean pipelines and port will maintain marketable characteristics of oil produced under Vostok Oil. This oil is characterized by unique premium qualities with extremely low sulfur content of 0.01-0.04% and low density.
For comparison, Brent has 0.45%, WTI 0.45%, Urals 1.5%, ESPO 0.5%, Siberian Light 0.6% and Eagle Ford (Texas ) 0.2%.
Vostok Oil’s low unit production costs and minimal carbon footprint, 75% lower than other major projects, make it the most environmentally friendly “green” hydrocarbon production project today.
“The project includes wind power to maximize the transition to clean energy consumption without greenhouse gas emissions,” Vostok Oil chief executive Vladimir Chernov said.
“It is too early to talk about the planned capacity of wind power plants (WPP). The final decision will be made after a study of the wind potential of the territory. But it is already clear that the maximum capacity of wind power plants can reach 200 MW. leading Chinese wind energy companies are considered as potential partners,” Chernov said.
In November 2021, Rosneft announced that it had signed cooperation agreements with several Chinese companies to study the wind potential of the project.
Vladimir Chernov said the project will also provide 9 to 12 gas turbine power plants with a capacity of 300 MW to 1 GW. “We are looking at building a power system where the plants will be staged with associated petroleum gas nearby,” he said.
The company said Vostok Oil would use 99% of its associated petroleum gas to fuel its power plants, one of the highest associated petroleum gas utilization rates in Russia.
The project fields currently consume approximately 400 MW of electricity. Vankor’s only power plant, with a capacity of approximately 200 MW, currently covers these needs. It was connected to the unified energy system of Russia in 2015. The second is the Polar power plant, with a capacity of 150 MW, which will be launched under the project in December. Construction of Irkinsk’s third power plant, with a total capacity of up to 850 MW, is expected to start operating in winter, Chernov said. Vostok Oil will build about 3.5 GW of new capacity and about 7,000 km of transmission lines. Vostok Oil’s power plants are an example of successful import substitution: more than 99% of equipment and components are manufactured in Russia.
The Vostok Oil project is producing at full capacity on the Vankor cluster. “Rosneft is developing the project jointly with Indian companies. As of 2016, 49.9% of Vankorneft is owned by a consortium consisting of ONGC Videsh, Oil India Limited, Indian Oil Corporation and Bharat Petroleum. Thanks to the successful development of the Vankor cluster and the vast experience accumulated while working there, the Vostok Oil project is proceeding according to plan.
The Vostok Oil project will employ up to 400,000 people and create more than 100,000 jobs during the exploitation phase in the fields and nearby settlements.
A total of 15 field camps and two airfields are planned to be built for the Vostok Oil project. All the installations will be self-supplied by the associated petroleum gas.
At this year’s Economic Forum in St. Petersburg, Rosneft CEO Igor Sechin presented a flask of oil produced under Vostok Oil to the public as proof that the project was successfully implemented. He called Vostok Oil “the Noah’s Ark of the global economy”.
“Russia, with its energy potential and portfolio of first-class projects, such as Vostok Oil, can meet the world’s long-term needs for affordable energy resources and is certainly such a lifesaving ark,” Sechin said.
According to him, the implementation of the project is vital to balance the global energy market, which is already beginning to face serious shortages of raw materials.
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