Industrial Potential of the Murmansk Oblast in the Hydrocarbon Resources
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DEVELOPMENT STRATEGY UDC 338.45:622.276(470.21) © Fadeev A.M., Cherepovitsyn A.E., Larichkin F.D. Industrial potential of the Murmansk oblast in the hydrocarbon resources development of the Arctic shelf The article deals with the spectrum of the economic questions which concern the effective utilization of the Murmansk Oblast’s industrial potential in the development of the shelf deposits. The article shows a comprehensive analysis of the industrial complex and an objective appraisal of the conditions for the oil and gas industry development in the Murmansk Oblast. The authors have pointed out the formation of organizational and economic mechanisms for utilization of the regional enterprises’ industrial potential in the development of the oil and gas projects as well as other large industrial projects in the Murmansk Oblast. Oil and gas industry, industrial potential, the Arctic shelf, hydrocarbon resources, oil and gas cluster. Aleksey M. FADEEV Ph.D. in Economics, Senior Scientific Associate of the G.P. Luzin Institute of Economic Problems of Kola SC RAS [email protected] Aleksey E. CHEREPOVITSYN Doctor of Economics, Chief Scientific Associate of the G.P. Luzin Institute of Economic Problems of Kola SC RAS [email protected] Fyodor D. LARICHKIN Doctor of Economics, Professor, Director of the G.P. Luzin Institute of Economic Problems of Kola SC RAS [email protected] Relevance of research Worldwide hydrocarbon resources are Under present-day conditions the consumed in volume terms and firm oil and development of the global economic system is gas demand determines priorities in the largely determined by the use of hydrocarbon resources as the efficient energy carriers and expanding of production and placing in chemical raw materials. operation of new fields. Economical and social changes: facts, trends, forecast 4 (16) 2011 21 Industrial potential of the Murmansk oblast in the hydrocarbon resources development of the Arctic shelf The oil and gas industry occupies a special Today the important and urgent task is to place in the Russian economy. This sector form the scientific approaches and tools for provides the functioning of national economy effective industrial policy in the new producing in our country. In modern conditions region, which is aimed at full and effective hydrocarbon export revenues form a significant implementation of the producing region’s share of currency earnings and the consolidated industrial potential. state budget. Resource potential of the Arctic shelf in One of the modern trends of the global oil Russia and prospective oil and gas projects and gas production is the increasing of oil and Currently the Murmansk Oblast has gas share from the offshore fields. Russia begins achieved a status of the capital of the new oil to form a new phase in the development of the and gas province in the north of Russia. It is oil and gas industry and implements large-scale one of the most industrialized and attractive shelf projects for oil and gas production. regions for the investors. This trend leads to the formation of oil and The Murmansk Oblast had organized the gas provinces. They are new producing regions effective geological operations before it became involved in the development of deposits. a new center of oil and gas production. The Producing regions is a complex subject of largest fields in the Barents sea, the Pechora sea prediction and control. An effective industrial and the Kara sea (fig. 1), some of which were policy in the producing region largely unique in their reserves, had been prospected determines the social and economic over the past 25 – 30 years. Thus, according to development and influences over the dynamics experts, the Western Arctic shelf contains nearly of budget revenues, the development of 75% of Russia’s shelf hydrocarbon reserves. the territorial infrastructure, the rate of It is a strategic region for the development of employment and population’s incomes. the oil and gas industry. Figure 1. Scheme of prospective structures and works based on the use of hydrocarbon raw materials (according to Federal State Unitary Enterprise “AMNGR”) 22 4 (16) 2011 Economical and social changes: facts, trends, forecast DEVELOPMENT STRATEGY A.M. Fadeev, A.E. Cherepovitsyn, F.D. Larichkin Table 1. Characteristics of the resource base of the Arctic water areas in Russia [1] Indicator Value Initial total producing resources (ITR) of hydrocarbons Near 80 billion TOE In addition, in the contestable jurisdiction area of Russia and Norway 6,5 billion TOE Producing reserves of oil More than 400 million tons Reserves of gas More than 8 trillion cubic meters Extent of of ITR of hydrocarbons 6.3% Hydrocarbon deposits 25 Local objects (revealed and prepared) 524 Efficiency of deep drilling 27 thousand TOE / running meter Table 2. Characteristics of the exploration work in the Arctic water areas [1] Prospecting Deep drilling Prospecting seismology 2D seismology 3D Sea Volume, Number Volume, thousand Density, running Volume, km2 running km of wells running km km/km2 The Pechora Sea 70.83 21 83.7 0.8 2191.5 The Barents Sea 93.63 34 275 0.27 2404 The Kara Sea (including inlets 52.29 28 126.5 0.13 3159.5 and bays) The Laptev Sea - - 30.2 0.04 - The East Siberian Sea - - 8.8 0.01 - The Chukchi Sea - - 13.3 0.03 - TOTAL: 216.75 83 537.5 0.13 7755 The revealed unique resources of Shtokman gas-condensate field, the annual hydrocarbon raw materials on the Arctic shelf production volume is planned to be 70 billion (tables 1, 2) have fundamentally changed the m3 of natural gas. It is compared to an annual prospects and development of the fuel and gas production of Norway which is one of the energy complex and incident industries not largest suppliers in Europe. only in the Murmansk Oblast but in Russia in Produced raw materials will be transported whole. by the sea pipelines to the shore of Teriberskaya One of the most promising and top priority bay. A LNG plant, a port transport and developing object is the Shtokman gas- technology complex, a gas complex preparing condensate field. It was discovered in 1988. The plant and other industrial facilities will be field is located in the central part of the Barents situated here. It is planned to build a gas Sea, 600 kilometers north-east of Murmansk. pipeline “Murmansk – Volkhov” to transport The deep of the sea ranges from 320 to 340 gas to the Unified Gas Supply System of m in this area. The explored reserves of the Russia [6]. Shtokman gas-condensate field are estimated Another field which is planned to be at 3.7 trillion cubic meters of natural gas and developed soon is the Prirazlomnoe oil field. more than 31million tons of gas condensate [6]. The field was discovered in 1989. It is located The developing project of the Shtokman on the Pechora Sea shelf, 60 km out from shore gas-condensate field has the strategic (township of Varandei). The deep of the sea importance. It is planned that the field will in the field area is 19 – 20 m. The recoverable become a resource base for the shipping of oil reserves of the Prirazlomnoe field account Russian natural gas both pipeline and liquefied for 46.4 million tons. It allows to achieve an gas (LNG) to the Atlantic basin markets. annual production level of about 6 million According to the developing project of the tons [9]. Economical and social changes: facts, trends, forecast 4 (16) 2011 23 Industrial potential of the Murmansk oblast in the hydrocarbon resources development of the Arctic shelf Gazprom is considering the opportunity of In autumn 2005 the close corporation refinery building in the Murmansk Oblast to Arcticshelfneftgas began to build a oil-loading process oil from the Prirazlomnoye field and complex “Lavna” on the western shore of Kola then from the Dolginskoye field. The refinery’s Bay which will be joined the system of the capacity in the township of Teriberka in Murmansk traffic center. The Ministry of the Murmansk Oblast in the event of its Transport of Russia has approved the general building could reach about 5 million tons per scheme of its development. It is expected that year. It is expected that oil production in the the capital investment in the development of Prirazlomnoye field will begin in 2011.The peak Murmansk port will have amounted to about production in the amount of 6.6 million tons $ 2.5 billion by 2015. According to forecasts, per year will be reached in 6 or 7 years [7]. It is freight turnover of the port will have amounted planned that oil production in the Dolginskoye to 78 million tons by 2015 (38 million tons of field will begin in 2016. The oil production will dry cargo and 40 million tons of bulked cargo). be brought up to 6 – 7 million tons per year. One of the problems of hydrocarbon exports Initially the oil from the Prirazlomnoye field from the port of Murmansk is the fact that any will be exported. But the largest part of oil will be pipeline isn’t laid to Murmansk nowadays. processed after the construction of the refinery Export commodities are delivered by freight and the possibility of exports will be reserved. trains but railway traffic capacity is limited. It The main port in the region is the Murmansk should be noted that the idea to build an oil Commercial Seaport (MCS). It is a kind of the pipeline that would link the Kola Peninsula and Arctic gateway of Russia. The port specializes Western Siberia is promising. in the transshipment of ore and chemical It will be recalled that the oil companies products.