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Russian Arctic Oil Project Moves Forward Despite Sanctions
Developing
In Short: A $118 billion Arctic oil project by Rosneft, despite sanctions, is advancing with local contractors and suppliers.
The $118 billion Arctic oil project, known as Vostok Oil, is moving forward despite sanctions imposed on Russia since its invasion of Ukraine. The project, spearheaded by Rosneft, includes a 790-kilometer pipeline and a port on the Taimyr Peninsula, according to an investigation by Systema and Arctida.
Speaking at the opening ceremony for the first stage of the project on September 5, President Vladimir Putin called it a 'momentous event' for the Arctic region and Russia. The project aims to bolster Russia's presence in the Arctic and maintain oil production as reserves in more accessible parts of the country deplete.
As Western oil-services firms left Russia due to sanctions, Rosneft and other companies involved in the project adapted by relying on local contractors and suppliers. This shift underscores the Kremlin's determination to proceed with the project.
The connections between project contractor Pumpyansky and Sechin date back to at least 2009, when Pumpyansky joined a government metals-industry commission headed by Sechin. Pumpyansky was sanctioned in March 2022 and subsequently withdrew from his companies, highlighting the challenges faced by the project amid tightening sanctions.
What's still developing
- A web of contractors, suppliers, and others with links to the 10-trillion-ruble ($118 billion) project includes a billionaire Sechin associate, several companies connected to Rosneft, and the father of Putin’s purported partner, Alina Kabayeva, Systema, RFE/RL’s Russian investigative unit, discovered in conjunction with Arctida, an NGO focusing on the Russian Arctic.
- Pumpyansky was hit with Western sanctions in March 2022, shortly after Putin launched its all-out war against Ukraine, and soon withdrew as beneficiary of Sinarastroikomplekt and his main company, TMK -- at the time the world’s biggest steel-pipe producer -- and resigned from their boards.
- We provide what many… For the Kremlin, the giant Vostok Oil project in the frigid Far North is crucial to two goals: bolstering Russia’s presence in the Arctic and keeping production of the key export commodity going as reserves in more accessible parts of the country are depleted.
- It’s also a case study of how a huge, state-run corporation like Rosneft -- headed by Igor Sechin, a longtime ally of President Vladimir Putin -- goes about putting such an enterprise in place amid increasingly tight Western sanctions over Russia’s war on Ukraine, an RFE/RL investigation indicates.
Sources
- Crude Oil Prices Today | OilPrice.comlink