Ecological and political challenges of oil drilling industry

Scandals in oil industry are common in contemporary Russia.
Oil and gas drilling industry starts booming in the Barents Sea. Russia has no experience of oil drilling and cooperates with the countries working in this sphere. Norwegians faced the same problem 25 years ago and asked the USA and Great Britain for assistance.

Unfortunately, Russians did not have the best way of doing this. The project of
Prirazlomnaya oil drilling platform requested much funding, as any innovation.
Joint stock company  Sevmorneftegaz  working on the project, decided to
construct the four blocks of the platform foundation in Russia, in Sevmash plant
(the first block assembling was completed in February 2004), and to purchase the
upper part of the platform from Norwegians. Norway is conducting mass
replacement of drilling equipment in compliance with the requests of the
Ecological Convention for Protection North-Eastern Atlantic (OSPAR), and was
supposed to sell the outdated equipment very cheap.

The situation reminds the scheme of taking used vehicles away from Western
Europe. The average Russian will be happy to have the used foreign vehicle,
while the European is eager to get rid of it. Everybody is happy about this
deal, except for Russian environmentalists who are sorry to see their country
becoming a global dumping area. Being recently  decorated  with radioactive
waste, Russia gains not only investments, but also creates endangered future for
next generations of its citizens.

Norwegian drilling platform  Khatton  having history of radiation, was purchased
for the project. As a rule, drilling equipment accumulates radioactive elements
from the depths of the Earth. These elements contaminate the drilling equipment,
and it is easier to replace the equipment than to clean it. The parties of the
deal were obviously well aware that the drilling equipment produced some 20
years ago, could contain radiation.

Monitor TLP Ltd company registered in the Kaiman Islands purchased Khatton
platform from Norwegians at $29 million and sold to Sevmorneftegaz company at
$67 million. Extremely high profit in the deal says that some Russian
businessmen  experienced in off-shore operations, arranged the deal. After the
deal was done, the  intermediary  was quick to  disappear . This is the matter
of law-enforcers. The police have to think that the hundreds of Sevmash workers
put their health at risk for the sake of some individual s well-being.

Norway has already expressed its concerns. Radioactive safety has been the issue
of heated debates in Russian-Norwegian relations. Norway sponsors scrapping the
used Russian submarines in the Kola Peninsula. As soon as the information on
Khatton platform was released, Norway made public its intentions to provide
Sevmash with the money equivalent to the cost of the purchased platform.

However, Sevmash replied that it needs no money because everything is good, no
pollution of environment takes place. Head of Law Department of Sevmash Vladimir
Golovchenko wrote a letter to local media outlets in town Severodvinsk denying
the allegations of pollution, and left for his new job in St. Petersburg.
Norwegians calmed down and stopped offering money+
Meanwhile, Norway is not only offering money, but is also laying claims for the
part of territory in the Barents Sea (previously the territory was under
jurisdiction of the Soviet Union).

After making economic breakthrough by exploiting oil and gas fields of the
Northern Sea, Norway became concerned that the oil reserves in the Northern Sea
can be exhausted. Currently Norway  lays hopes for the rich oil deposits of the
Barents Sea explored by Soviet scientists in the end of the 70s.

 The Arctic sea border between the USSR and Norway was marked in 1926, and there
were no arguments about it until the beginning of the 80s when Norway said that
the part of the sea bottom belonged to the USSR, would be under Norwegian
jurisdiction.
Norwegians differently interpreted Geneva Convention of 1958 and International
Convention on Naval Law of 1982, and this resulted in arguments about the area
of 155,000 thousand square kilometers.

Norway has been very persistent in the matter. Obviously the reason was big oil
and gas deposit  Fedinskoe  located in this area. Russia had surprisingly
tolerant position and mainly tried to attract Norwegians with the idea of joint
exploitation of the area natural resources. Norwegians repeatedly rejected this
offer.

Meanwhile, the Barents Sea bears minimum one third of Norwegian oil resources,
say Deputy Head of R&D Department of Statoil Norwegian Corporation Hans
Iennestad. Innovative methods of oil drilling could allow to exploit these
reserves much longer than the ones in the Northern Sea. Both Norway and Russia
could benefit from cooperation.

Norwegians could offer much better technologies than notorious Khatton platform.
Let us hope that Norway and Russia will finally establish productive
cooperation. Let us wish Russian officials to think more about future of their
country which currently causes questions,  How can you live so poor having rich
natural resources and talented people?

Sergei Aprelev
Captain, member of International Association of Naval Law.
Exclusively for PRAVDA.RU