"Vostok Oil" in Taimyr: "whim" of the Russians or an adequate response to "decarbonization"?

"Decarbonization" economics in the past few years has become a major global trend. Leading powers are preparing for a systematic reduction in oil and gas consumption, replacing them with renewable energy sources (RES). So far, it is not working out very well, but no one is going to cancel the installation for "greening". Against this background, Rosneft is opening the Vostok Oil oil production project in the Far North with a total cost of 10 trillion rubles. What is this, some kind of "whim" of the Russians who inadequately assess the situation? If so, why are large Western investors actively investing billions of dollars in it?

The British oil company BP, the Organization of the Petroleum Exporting Countries (OPEC), and the International Energy Agency (IEA) almost simultaneously announced in their analytical reports that global changes in the oil market are inevitable. They disagree on the details, but they are unanimous in the conviction that a decrease in the consumption of "black gold" is inevitable.



For example, by 2025, the decline in oil demand in the transport sector in the United States will amount to 7%, in the European Union - 9%, and in Japan - all 13%. In the American industry, the decline in oil consumption will be 24%, in the European - 4%, and in the housing sector it will be 24% and 27%, respectively. There will also be a change of leadership in Southeast Asia. If earlier China was the largest oil importer, India will soon take its place. The Chinese economy is projected to annually reduce oil consumption by 1,4% and 2,6% in industrial and residential sectors, respectively. But New Delhi, on the contrary, will increase it by 1,3% and 1,7% annually.

Thus, the transformation of the global energy market is inevitable. However, it does not mean completely eliminating the use of fossil fuels. Leading powers such as the United States, China, Japan, and the EU countries can indeed make an energy transition towards renewable energy sources, but they cannot do without oil either. For example, it is obvious that China will retain its petrochemical industry, which, according to all forecasts, will require no less raw materials than before, or even more. The same can be said about the competitors of the Celestial Empire. At the same time, their place as the main consumers of "black gold" will be taken by those who are catching up, like India and others.

If you look at the situation from this angle, then the Rosneft project ceases to seem like some kind of naive whim. On the contrary, Vostok Oil meets all the requirements of the time: it is logistically convenient, its oil is classified as “green”, and the emission of carbon dioxide during its production will be at a record low level. Let's take a closer look at this new Russian oil and gas province in the Arctic region.

At firstAs for transport accessibility, Vostok Oil is very well located. Yes, this is very far from the inhabited lands in the north of the Krasnoyarsk Territory, but the laying of pipelines from the fields to the coast will allow the supply of oil and liquefied natural gas by tankers along the Northern Sea Route in both directions at once, to Europe and Asia. A seaport with a throughput capacity of 115 million tons will be built in Taimyr. In total, 15 industrial settlements, 2 airfields, as well as thousands of kilometers of pipelines and power grid facilities will be built in the Arctic. Thanks to Vostok Oil, Russia will receive a habitable outpost in this strategically important region.

Secondly, arctic oil is of an unusually high quality. Its sulfur content is so low that it is also called "light and sweet" by analogy with American shale oil. The content of sulfur impurities in it is only 0,01 - 0,04% versus 1,8% for the Urals grade. For its processing, there is no need even for special additional equipment for separating sulfur, while the amount of harmful gases emitted will be reduced. This makes it possible to classify Russian products as “green” oil. Taking into account gas condensate, the total proven reserves of the fields are estimated at 44 billion barrels. Undoubtedly, oil of such quality, which is higher than that of the Brent benchmark, will be in demand even with the general trend of decreasing fossil fuels. Oil oil strife.

Thirdly, the so-called "carbon footprint" in the production of Russian oil will be noticeably lower than that of competing projects. All associated gas will be utilized and burned, turning into electricity, which will be used for the needs of production and field settlements. Wind generators will also contribute to providing Vostok Oil with energy. As a result, when one barrel of oil is produced, the volume of emitted carbon dioxide will decrease from 50 kilograms to 12.

It turns out that Rosneft's ambitious project is not some kind of relic of a passing era; on the contrary, it keeps pace with the times. It is not surprising that there is already a queue of those wishing to join him. Earlier, a well-known international trader Trafigura acquired a 10% stake for 7 billion euros. Now it is reported that the acquisition of another 5% of this oil and gas project by a consortium of Vitol and Mercantile & Maritime Energy is being reported. As you can see, people who are deeply in the subject are not in a hurry to bury oil at all.