The Russian Energy Ministry is ready to discuss plans proposed by non-government companies on off-shore projects, Energy Minister Sergey Shmatko said today. According to current subsoil legislation, only two state companies – Gazprom and Rosneft – are allowed to operate off-shore. The Russian Ministry of Natural Resources favors liberalizing access to the continental shelf and says the resources of these two companies are insufficient to develop the off-shore resources. Shmatko said that huge investments were needed to conduct off-shore projects and that if private companies wanted to work off-shore, they need to convince the Russian authorities that they are capable of doing so. "To begin work off-shore, we must be convinced that the intentions of companies, investors and Western partners are serious", Shmatko said.
According to RIA-novosti, the Energy Ministry is ready to review all proposals sent in. "We know of such proposals. Let's simply sit down together and gather companies' proposals for the shelf – to see what specific projects interest them and what money and technologies they can bring to develop them", Shmatko said. The Economic Development Ministry estimates that 9.3 trillion rubles is needed to explore and develop the shelf. According to the ministry's most recent estimates, Rosneft and Gazprom would need 165 years to develop the shelf given the rate of their pre-crisis investments (56.4 billion rubles in 2008).
Russia's continental shelf covers 6.2 million square kilometers. Scientists believe that 4 million square kilometers have potential for oil and gas development. Initial total reserves are estimated to be about 100 billions tons of fuel equivalent. The majority of the reserves are concentrated along the Arctic shelf, including the Karsk and Barents seas.
