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Far East risks

Rostislav Turovsky

Doctor of Political Sciences, Professor of HSE, Scientific Editor East Russia

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Rostislav Turovsky, Vice-President of the Center for Political Technologies:

- Currently Western companies are in a difficult situation. The authorities of their states do not demand to curtail work in Russia, but the most severe economic sanctions against Russia have not yet been adopted. In any case, Russia becomes for them a territory of increased investment risks, and Western business is forced to closely monitor the political situation and constantly assess the feasibility of working in our country. In addition, the sanctions affected at the personal level important counterparties of Western capital, primarily Igor Sechin, which leads to the complication of communications with his participation. Although Rosneft is not directly subject to sanctions, the prospects for strategically important projects in the Far East are very strongly linked to its activities and its relations with the West.

On the American side, the most important player in the Far East is such a global scale giant as ExxonMobil. Together with Rosneft, she actually manages the Sakhalin-1 project, where the Americans own 30%, and Rosneft owns 20% (30% is controlled by the Japanese company SODECO, 20% by the Indian ONGC). The Sakhalin-1 project is considered the largest oil and gas project in Russia in terms of foreign investment. PSA on it was signed in the distant 1996-th year, but the real work began much later. Nevertheless, the project is already working in full force and has good prospects, albeit for a number of reasons (not related to sanctions). As stated on its official website Exxon Mobil, this project gave the Russian budget system 3,8 billion dollars, including. 1,3 billion dollars - to the budget of the Sakhalin region. In addition to oil exports, Sakhalin-1 provides gas supply to the Khabarovsk Territory, directing natural gas to the pipeline stretching from Sakhalin to Primorye.

In addition, the Americans are quite active in financing infrastructure and social projects in Sakhalin and the Khabarovsk Territory. So, according to their data, investments in infrastructure amounted to more than 220 million dollars. Recently, cooperation with the Sakhalin State University has been confirmed, and this is only one of a number of socially significant projects of the company.

Now Sakhalin-1 is the largest oil project of Sakhalin and the second largest gas project. The problems and prospects of this project are related to its further expansion, which can be complicated in connection with the sanctions and the uncertain position of the American side. In May, there were reports of the possible sale of Exxon Mobil's stake in the project, but then they were refuted, including. By I. Sechin himself, who, obviously, is not interested in such a turn of events. Meanwhile, the previously commissioned Chayvo and Odoptu fields have already reached peak production levels. After 2008-09 years. There was a slight decrease in oil and gas production (2013 million tons of oil and 7 billion cubic meters of gas were produced in 9,9).

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Therefore, for Sakhalin-1, confidence in the prospects of the project from its co-owners is extremely important. The 2014 year should be the year of the second phase of the project in connection with the upcoming launch of the third and last Arkutun-Dagi oil field, as well as the expansion of gas production to Chayvo. Of particular importance is the construction of a plant for the production of liquefied natural gas in the framework of the Far Eastern LNG project. It was assumed that the first stage of the plant, under which the site was already selected on Sakhalin, would start working with 2018, producing about 5 million tons of LNG per year. But the implementation of the project is complicated by friction with Gazprom, which is promoting its projects - expansion of production at the existing plant within the Sakhalin-2 project and the construction of a new plant in Primorsky Krai. As a result, to date, it is not clear whether the Far Eastern LNG project will be implemented, in spite of all I.Sechin's lobbying efforts.

Another interest of Exxon Mobil to work in Russia and cooperation with Rosneft arose as the implementation of the agreement on strategic cooperation of the parties signed in 2011. In February 2013, a new project appeared - two companies intend to participate in the exploration of seven Arctic sites, three of which are located on the shelf of the Chukchi Sea, - North-Wrangel-1, North-Wrangel-2 and South Chukchi.

In the changing conditions, the question becomes urgent as to how much Exxon Mobil is interested in working in Russia. According to experts, the share of oil and gas produced in Russia, taking into account the share of Exxon Mobil in projects, is less than 3% of all its oil and gas production. Obviously, the company has many projects in various countries around the world. Arctic sites in this regard are becoming the most problematic, because they have not even been explored, and can remain without investments. Perhaps, the prospect of "Far Eastern LNG" is of critical importance now, since it is the work on the liquefied natural gas market that is now attracted by the world's leading companies. But here the Sakhalin-1 project is vulnerable. It is possible to develop the same existing fields and sell their oil for export, but this is not so large amounts (with possible growth due to Arkutun-Dagi and yet a decline in the long term). In this regard, it is possible that the issue of leaving the Americans from the project, taking into account not only geopolitical, but also financial and economic problems, will rise again and again.

The full text of R.Turovsky "The Far East and the West: What Sanctions Cause" read 9.06.2014 in the "Regions" rubric.