Russian Natural Resources and Environment Ministry Deputy Minister Denis Khramov announced the plan to postpone drilling operations all on Russia’s Arctic Shelf.
Khramov said that with the postponement of the drilling, the companies will have to increase the number of well.
The number of wells will increase from 19 to 28, to be drilled in 2019.
Zaiwalla & Co founder and senior partner as well as international lawyer representing oil majors in both Russia and Iran, Sarosh Zaiwalla said that the sanctions are the cause behind ending of the Arctic exploration by the oil industry.
The US, Europe and other countries imposed sanctions against Russia following its military intervention in Ukraine.
Recently, oil and gas giant Shell has abandoned the Burger J exploration well in Alaska’s Chukchi Sea following discovery of insufficient oil and gas to carry out further exploration in the Burger prospect.
The decision to abandon the well also comes due to high project costs as well as the challenging and unpredictable federal regulatory environment in offshore Alaska.
Zaiwalla added: "Sanctions by the US and EU governments on Russia have severely impacted the Russian oil industry, cutting it off from the international market and causing the industry to turn inward.
"As a result, major international exploration ventures such as those in the Arctic have suffered as restrictions on financial and technical assistance have forced oil majors to pull out.
"However, rather than throw in the towel like their Western counterparts, it can be expected that Russian oil majors will now look to the Middle East and Asia to realize their ambitions in the Arctic."
The new sanctions are believed to affect long-term funding plans to develop shale and deep-water oil resources in the region for Russian energy firms.
