EFFECTS OF SECTORAL ANTI-RUSSIAN SANCTIONS ON THE POSSIBILITY OF GEOLOGICAL EXPLORATION DRILLING IN THE ARCTIC SEAS

Abstract

This paper analyzes the past and current situation of geological exploration drilling on the Arctic region continental shelf. Along with climate conditions, the strategy of drilling is greatly infl uenced by technical accessibility of licensed sites, the latter depending on achieved level of equipment and technologies. Since 2014 the USA, the European Union countries and a number of other states have imposed sanctions against Russia. Sectoral sanctions, prohibiting access to technologies employed in the Arctic region shelf projects, have become an important part of these sanctions. This research is aimed at assessing the infl uence of sectoral anti-Russian sanctions on geological exploration drilling in the Arctic seas. The choice of geological exploration drilling is not accidental as the majority of Russian Arctic projects are at this particular stage now. Over the recent forty years, the country has accumulated considerable practical experience of conducting geological exploration drilling and the Arctic region field development. Our analysis demonstrates that modern Russia has necessary technologies for exploration and field development in the Arctic region. In fact, Russia is the only country, which actually continues its operations in the Arctic region amid a sharp decline of oil prices. Imposing sectoral sanctions related to equipment and technologies of developing the Russian Arctic shelf is inefficient. It is forecasted that in the coming decade, the continuing global warming process will make the majority of regions of the Barents Sea and the Kara Sea – where a number of large and gigantic fields have already been discovered – more accessible for conducting geological exploration drilling. It is possible to use here the traditional types of off shore drilling units with a low ice rate. This will totally eliminate any technical and technological problems of drilling. The USA are expected to enter the market of arctic hydrocarbons from new fields by the middle of the 30s of the 21 century. One can forecast a substantial output from exploiting Russian fields to be achieved by the same time. Hence, imposed sanctions are mainly aimed at delaying the implementation of Russian Arctic region projects and synchronizing them with American projects in order to create extra competition for Russian oil industry and for selling its products on the global market. Low global price for hydrocarbons and financial sanctions can exert more infl uence on the development of Russian Arctic fields than restricted access to equipment and technologies.