Rosneft already operates several promising sites in Russia’s Arctic region including the Vankor field (together with Bharat PetroResources Ltd) and Suzunskoe field. Sanctions also prevent Russia’s oil and gas industry from accessing the high-tech drilling and surveying equipment needed to exploit Arctic resources. However, it is unclear if there are sufficient benefits to justify and sustain full-fledged Arctic oil development, especially when considering staggering upfront costs. Cost blowouts are a serious threat to an Arctic project's goal of achieving the industry average of 15-20% IRR (internal rate of return). Rosneft and Putin’s plans for the Russian Arctic are ambitious to say the least.

Source: Forbes April 17, 2019 13:30 UTC