Shell suspends GazpromNeft joint venture operations
14 October 2014
GazpromNeft General Director Aleksandr Dyukov told journalists on October 8 that sanctions had prompted Shell to suspend work on its joint venture with Gazprom Neft developing the Bazhenov field in western Siberia, according to Interfax. Khanty-Mansiysk Neftegazoviy Soyuz was set up last year to develop shale oil resources in the field.
Dyukov said GazpromNeft would continue with the project but admitted that efficiency would suffer as western technology and equipment was withdrawn.
An estimated 75 billion barrels of technically recoverable shale oil resources may lie in the Bazhenov formation, according to the US Energy Information Administration, more than in the United States, the world's leading shale oil producer.
Under sanctions imposed on Russia over Ukraine by the EU and the United States, companies from Europe and the USA are not allowed to provide services to Russian companies including deepwater drilling, development of fields in the Arctic or shale oil fields, nor are they allowed to deliver equipment or technologies for these types of projects.
Another joint venture between GazpromNeft and Shell - Salym Petroleum Development (SPD) - is also experiencing difficulties because of the sanctions. Dyukov said that Shell is now studying how it could continue work on the SPD project under the sanctions regime.
On October 13 Norway also confirmed it had signed up to the EU’s economic sanctions against Russia, despite not being an EU member.
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