The first Arctic decree from Russia’s new prime minister is about oil

Mikhail Mishustin has granted Gazprom Neft large drilling licenses in the Yamal Peninsula.

By Atle Staalesen, The Independent Barents Observer - January 22, 2020
Russian Prime Minister Mikhail Mishustin chairs a meeting with members of the government in Moscow, Russia January 21, 2020. (Ekaterina Shtukina / Sputnik /Pool via Reuters)

Three days after he was announced as Russia’s new prime minister, Mikhail Mishustin granted Gazprom Neft the right to develop the Khambateyskoye oil and gas field in Yamal.

The oil company will pay about 2 billion rubles for the production licenses, according to the federal government.

The field is located partly on land, partly offshore in the Gulf of Ob. Gazprom Neft already controls several nearby licenses, and production is in full swing at the Novy Port project located only few kilometers to the south of the Khambateyskoye area.

The new resources in the area could ultimately be connected to a projected natural gas pipeline that is to stretch eastwards across the Gulf Ob. The new infrastructure will cost up to 75 billion rubles, newspaper Kommersant reports.

The Yamal Peninsula is a key priority area for Gazprom Neft. Production at Novy Port was launched in 2014, and volumes sent through the project’s Arctic Gate terminal can reach up to 8.5 million tons per year.

Several more decrees, laws and regulations about Arctic developments will soon be awaiting Mishustin’s signature. Among them is a new Law on the Arctic, due to be adopted in the first quarter of the year.

Also that document will place oil and natural gas extraction as a cornerstone of developments. The new legislation is expected to give the oil, gas and petrochemical industry major tax cuts in new Arctic projects.