Russia's first Arctic oil rig will contribute taxes worth 40 billion rubles ($700 million) per year to the Russian budget, an executive at the rig's operating company said Thursday, knocking hopes by environmentalists that the project would mothballed due to low oil prices.
Thirty Greenpeace activists were jailed in Russia after attempting to storm the Prirazlomnaya platform in the Pechora Sea in 2013. Environmentalists say Gazprom Neft, which runs the rig, lacks the technology to work safely in the fragile Arctic ecosystem.
But Gazprom Neft vice president Vadim Yakovlyev said Thursday that Prirazlomnaya would be profitable even with oil prices at $50 to $60 per barrel and promised handsome rewards for the government, which has prioritized industrialization of the resource-rich Arctic.
"The government's total income from the project over its entire life cycle will be 650 billion rubles ($11.5 billion)," he said, news agency TASS reported.
Yakovlyev said Gazprom Neft had been able to buffer the blow of low oil prices by signing long-term oil service contracts in return for guaranteed orders, according to the agency.
Environmentalists argue that the Arctic rig is as loss-making as it is dangerous. The WWF Russia in March released a report commissioned from the International Institute for Sustainable Development which said that even with tax breaks Prirazlomnaya would run huge losses if oil remained at $60 per barrel.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.