On February 11, 2020, two close partners with decades of cooperation history met in the Kremlin. Their top agenda is the Arctic. Igor Shechin has worked with Vladimir Putin since the 1990s and is considered one of the country's most influential figures. This time the Vostok oil project became a key issue for discussion.

Igor Shechin and his state-owned oil company Rosneft intend to develop large oil reserves on the wide tundra lands in the northern Urals and export them through the expected seaport on the Taimir Peninsula.

Rosneft leaders stated that Vostok Petroleum will include 15 new industrial towns, two airports, a seaport, about 800 kilometers of new pipelines, 3500 kilometers of new power lines and 2,000 megawatts of power production capacity. He explained that this would require 100,000 new jobs and would increase GDP by 2% per year.

Arctic coast

The project is based on the development of several fields, including at least three fields in the Vankor area. The new pipeline and projected seaport terminal will enable partners to export an estimated 25 million tons of oil annually through the North Sea route.

The pipeline will also be designed to carry oil from Payakha, an oil field located along the Yenisei River. By 2030, a total of 100 million tons of oil can be exported through pipelines and Taymyr's new seaport. Xie Qin had previously explained that a fleet of top ice-class Arc7 tankers would be built for the project.

Massive tax cuts

The oil company leader received the support he needed from the Kremlin. Russia's new legislation paves the way for large-scale investments in the company's new Arctic project and more large oil investments in the region.

Rosneft and other oil developers will receive substantial tax cuts to cover project development costs.

In January 2020, the Russian government passed a bill that includes the launch of nine new large-scale Arctic hydrocarbon projects with an investment of up to 14.7 trillion rubles (210 billion euros). The Vostok field is the largest new project planned.

Beihai route

Rosneft to lay an oil pipeline in the oil fields of Wancor and the Tamer Peninsula on the Arctic coast

In the context of the new project, the Kremlin is keen to increase cargo volumes on Arctic routes. Vladimir Putin listed the Arctic shipping route as a national priority in May 2018 and requested that the total annual freight volume of the route by 2024 reach 80 million tons.

According to Igor Shechin, it is the president's support for Arctic routes that is the reason for the development of Eastern Petroleum.

Working with India

The region will need to invest more than 10 trillion rubles (144 billion euros) and will invest 2 trillion rubles in the first phase of the project.

Rosneft has been actively working with Indian partners over the past few years, and the country ’s oil and gas minister, Igor Ivanovic, confirmed last month that Indian companies would join Vostok.

Igor Shechin told Vladimir Putin that in addition to Indian partners, Western companies will also participate. "There are many other Western investors, and we hope this will be a huge international project."

Putin praised Setin's new initiative. Oil and gas minister Igor Ivanovic said the project was indeed big, and of course there was vision. It includes increasing gross national product and increasing traffic on the North Sea routes, as well as strengthening Russia's position in the Arctic.Editor / Huang Lijun