Washington bans Russia's main Arctic oil driller

The subsidiary company of Russian natural gas producer Gazprom will soon experience additional problems with getting access to equipment and technology and working with foreign partners.

Along with several more Russian companies operating in the Arctic, Gazprom Nedra is included in the updated sanctions list issued by the U.S Treasury on the 14th of September.

Gazprom Nedra is one of Russia’s biggest oil and gas service companies and operates several of the rigs used for exploration of the country’s Arctic shelf.

As the sanctions were announced, the company’s rig Arkticheskaya was busy with well drilling in the Kara Sea. In a media report, the company shows how it this summer has followed up preparedness and security during drilling operations with the rig.

Over the last years, the Arkticheskaya has made several discoveries in Russian Arctic waters, including in the Skuratovskoye license area in the Kara Sea.

Gazprom Nedra also operates the Severnoye Siyanie, the semisubmersible rig that over the last couple of years has drilled several wells in the Kara Sea. After well drilling in the Barents Sea this summer, the rig was in September towed along the Northern Sea Route to Russian far eastern waters.

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The sanctions against Gazprom Nedra will affect its ability to obtain technology and cooperate with international partners. They could ultimately also compromise security as it becomes harder for the company to obtain spare parts and equipment.

But consequences for Gazprom will not be significant, says Mikhail Krutikhin.

According to the Russian journalist and oil industry expert, Gazprom does not pursue a comprehensive exploration program in the Arctic today.

“These sanctions will not affect it noticeable,” he says to the Barents Observer.

Krutikhin left Russia following the full-scale onslaught on Ukraine and today lives in Norway.

The Russian oil and gas industry’s main Arctic focus areas are today onshore in the Yamal, Gydan and Taymyr.

For follow-up of offshore license obligations, the companies are likely to find ways to circumvent the U.S sanctions. That could include the commissioning of Gazprom Shelf Project, the company controlled by Andrei Patrushev, the son of Russia’s powerful security hawk Nikolai Patrushev.

Patrushev and the Gazprom Shelf Project now looks set to become the main contractor on shelf exploration for both Gazprom and Novatek.