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Russia's top crude producer, Rosneft, is in talks with government authorities to delay work at its Arctic offshore projects as it has failed to drill some wells after Western sanctions blocked cooperation with international majors in the region, natural resources minister Sergei Donskoy said Friday.

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* May involve revision of the Kara Sea license: natural resources minister

* Makes discovery in E. Siberia with BP

Rosneft "did not manage to drill some wells" at a number of licenses where previously granted extensions expire this year, Donskoy told reporters, referring to Russia's state subsoil agency.

"Rosnedra is considering their proposals now - to delay by another 1.5-two years," he said.

The ministry could not specify the projects under consideration for postponement. Rosneft did not respond to a comment request.

Rosneft as a state-run company is the owner of the bulk of licenses for Russian Arctic blocks, along with Gazprom.

The company initially invited a number of international majors to its projects in the Arctic, including ExxonMobil to the region's most promising Kara Sea project, where the two had successfully drilled a well, before ExxonMobil had to suspend further work on the project over sanctions introduced in 2014.

Rosneft later announced a major discovery from the well, and continued appraising the drilling results. Earlier this year, the US oil giant said it was withdrawing from the JVs with Rosneft in Russia over persisting sanctions, citing losses.

Donskoy did not rule out that Rosneft may seek a revision of the Kara Sea license as well, although no such request has been received so far, he said.

A number of licenses have been revised in 2015-2016 as companies following the companies' application to shift the timeframes for exploration, seismic and geological survey and production on at least 15 of them, the ministry's officials said at the time.

Specific potential projects for delays in the current round of revisions remain unclear as the bulk of drilling in the region has been scheduled to start no sooner than 2019.

The license for a joint project between Rosneft and Italy's Eni in the Barents Sea, for example, envisages the drilling of the first well by 2020.

"The key phase of exploration drilling in the region will fall between 2020 and 2022," as part of the plan to drill 80 exploration wells between 2016 and 2018, deputy energy minister Kirill Molodtsov wrote in a column in Rossiyskaya Gazeta state daily earlier this week.

Current oil prices do not stimulate work in the Arctic so far. Russia's energy minister Alexander Novak earlier estimated that offshore projects in the Arctic could become attractive at prices above $80/b.

To encourage exploration in the region, the natural ministry urged the government to amend tax legislation to offer more tax incentives to the companies to stimulate further exploration in the Arctic, Donskoy said.

Russia has one producing Arctic offshore field so far, Gazprom Neft's Prirazlomnoye in the Pechora Sea. The field produced 2.64 million mt, or about 53,000 b/d, last year, according to the company.


The drilling of the first well at Rosneft-BP joint venture in Siberia has been successful as the companies have registered a discovery of the the Baikalovsky field in the Krasnoyarsk region, Donskoy said. The companies are continue the appraisal of the reserves there, he said, adding no further details.

Yermak Neftegaz joint venture was established in 2016 and focuses on geological exploration in West Siberia and the Yenisey-Khatanga basin in East Siberia.

--Nastassia Astrasheuskaya,

--Edited by Richard Rubin,