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Moscow’s Gazprom is set to commence oil production by the year’s end at the Prirazlomnoye Arctic oil project, located on the Pechora Sea shelf, 60km off the shore at water depth of 19 to 20m.

Earlier various environmental groups have protested drilling at the field over the dangers of possible oil spills.

As Russia depends on hydrocarbon sales for more than half of its budget revenue, Arctic offshore oil and gas development is said to be significant for the company.

Russian oil producer Rosneft has signed agreements with ExxonMobil, Eni and Statoil to tap Arctic deposits, but the projects may not produce any oil and gas before the 2020s, Reuters reported.

The Prirazlomnoye project has been designed to produce heavy, sour oil, and Gazprom has cited various technical reasons for delays that are occurring to delay production.

According to the estimations of media reports, total investment in the field discovered towards the end of the Soviet Union is ranging between $4bn and $5bn.

In seven to eight years, the company hopes to reach peak production of 120,000 barrels per day at Prirazlomnoye, which is expected to have oil reserves of 526 million barrels.

Built by Sevmash Production Association, the Prirazlomnoye field contains 72 million tonnes of oil reserves, enabling it to achieve the annual production level of 6.6 million tonnes.

"Arctic offshore oil and gas development is said to be significant for the company."

The offshore ice-resistant oil-producing platform will ensure well drilling, oil production, storage and offloading.

Gazprom expects to drill 40 slanted wells from it.

The license to explore and produce hydrocarbons in the field is owned by Gazprom’s wholly-owned subsidiary Gazprom neft shelf.

Image: Gazprom will commence oil production at the Prirazlomnoye Arctic oil project in 2013. Photo courtesy of Andrey Ivanov.