TNK-BP, the Russian joint venture of BP, is set to invest USD 10 billion in its Arctic oil fields, enabling export of its huge reserves in the region to Chinese markets by 2016. The company has an estimated 5 billion barrels of oil reserves in the remote Yamal fields in Western Siberia but, as yet, only very small-scale production because of the lack of export routes.
TNK-BP recently announced that it had signed a long-term contract with Transneft, the Russian state oil pipeline monopoly, for oil to be transported through Transneft's new Zapolyarye-Purpe pipeline. The 300mi pipeline, due to be completed by 2016, will unlock the potential of the Arctic oil fields, connecting Yamal to Russia's existing export pipelines to China.
The exports will help to feed growing Asian oil demand at a time when other Western Siberian fields are becoming depleted. TNK-BP said it would invest up to USD 10 billion in infrastructure, including new feed pipelines, enabling full-scale production from some of its Arctic fields to begin once Transneft's pipeline is ready.