Gazprom and Prirazlomnaya

Our campaign to protect the Arctic inevitably has brought us to loggerheads with many global oil companies. One amongst these is Gazprom, the state-owned Russian oil giant who is so far the only company in the world to begin extracting oil in the Arctic offshore. Their rig, Prirazlomnaya, started extracting oil in December 2013 and is expected to produce about 7000 barrels of oil each day.

Since Greenpeace advocate a strict ‘No Offshore Arctic Drilling’ policy, we take very seriously indeed the moves of Gazprom to pursue this industry in the remote Pechora Sea. We believe that it recklessly risks contaminating the pristine environment of this region.

Gasprom is the one of the biggest gas provider in the world, and is today Russia’s biggest company. Opening up the offshore Arctic is central to Gazprom’s future energy strategy and the company openly admits its plans to drill in numerous Arctic basins.

Prirazlomnaya is the world’s first operational Arctic rig. Sixty kilometres from land and drilled into 20 metres of water, it is the pride of the Russian oil industry. However, oil exploration at these latitudes is a risky affair and Prirazlomnaya is seen by many as a reckless and dangerous embodiment of political will, rather than a real boost to the country’s economy.

Greenpeace strongly opposes the operations of the rig, and to Gazprom’s further insurgence into Arctic drilling. The reasons for this are numerous and compound. Some are listed below:

  • Built largely from the old North Sea Hutton platform, Prirazlomnaya is a rusting gallimaufry of old parts. It took a total of 15 years to build, during 6 of which the platform lay rusting in a Murmansk shipyard. Still unfinished, the rig was dragged into position in 2011. Since then, it has been described as ‘technically obselete’.
  • Located above the 69th parallel, working conditions for much of the year are extremely difficult, cold and dark. Temperatures can drop as low as –50˚C. For two-thirds days of the year, the sea here is covered with ice; storms are frequent all-year round. Russian scientists have described drilling in the Arctic to be more difficult than exploring outer space.

  • Technology does not yet exist to deal adequately with oil spills in icy conditions. The exposure of oil to the freezing waters is something that has only been tested in small controlled environments. All previous assessments show that oil clean-up procedures in this environment would be made extremely difficult by 1) the increased viscosity of oil and 2) by the possibility of the ice becoming trapped under or between layers of ice.
  • With the nearest port of Murmansk being 1000 km away, the possibility of a quick and suitable response to a spill would be impossible.
  • The Prirazlomnaya emergency oil spill plan is only available to the public as a short summary. Furthermore, even this document reveals that Gazprom will rely on traditional clean-up procedures in the Arctic that simply do not work in icy conditions. Despite strong recommendations from the Arctic council, the full document was never released, further leading us to suppose that the science behind their clean-up procedure lacks sufficient integrity.The Pechora Sea is surrounded by national parks and nature preserves - such the “Nenetski“ and “Waigach” areas - that are habitats for protected and endangered species such as Minke whale, Atlantic walrus and Polar bear. In the event of a spill, emergency services would not reach the site before oil could have beached on and contaminated these nearby areas. Gazprom even admit that indigenous peoples could be adversely affected by such a catastrophe.
  • Even economically, Arctic drilling does not add up. Due to the astronomical running costs of such a platform, Prirazlomnaya requires huge amounts of government subsidy to break even financially. It is also exempt from paying Natural Resource Extraction Tax, and pays only a fraction of national export tax for the first decades of its production.
  • The oilfield contains an estimated 72 million tons of recoverable oil. Over the next 25 years the field is expected to be exhausted with peak production being achieved in the seventh or eighth year. Finally, the crude oil grade is of a high-sulphur, high-density, and low-quality grade and is very unlikely to demand high margins, even if extracted safely.

Action At The Gazprom Prirazlomnaya, Russia.
© Denis Sinyakov / Greenpeace

The overall impression one gets from Gazprom is that they are opportunistically exploiting the natural environment. The estimated average output of the well has been put at 6.6m tonnes/year. This roughly equates to the amount of oil spilled every year onshore through poor pipeline maintenance, according to the expert estimations.

Greenpeace’s past relationship with both Gazprom has been tumultuous. Most notably, last year 30 Greenpeace members were illegally arrested under piracy charges for their peaceful protest at the Prirazlomnaya rig. The situation received global attention, and brought the discussion of Arctic drillings to the media.

Through our campaigning for our colleagues’ release, Greenpeace managed to collect more than 3 million signatures in support of our ‘Save the Arctic’ campaign. However, our sense of relief at the release of our campaigners was undermined by this being on the same week as operations started at Prirazlomnaya.

We believe that the risks posed to the local environment by this venture are in themselves sufficient to stop drilling in this part of the world. However, when coupled with the poor economic prospects of this venture, to carry on seems nothing short of foolish. Gazprom makes tax payers in Russia subsidize the needless destruction of their country, while these funds could be spent developing and implementing alternative energy sources and energy efficient technologies.