Russia is continuing oil drilling operations in the Arctic, making further progress thanks to the West Alpha rig. This platform is, according to Reuters, heading North from Norway to be used for a Russian company known as Rosneft.
The impact of this rig on international relations between the United States and Russia is currently unknown. However, an American company, Exxon, will reportedly manage West Alpha in this area for at least the next two years.
Rosneft met with the Russian Geographical Society to discuss the ramifications of their work, in a Scientific Arctic Development meeting. Environmental as well as diplomatic concerns are being considered.
As this rig moves forward, oilfield insurance will be a key consideration. The manufacturer of the equipment is Norwegian company Seadrill, and its CFO, Rune Magnus Lundetrae, was quoted by Reuters describing the path that this rig will be taking.
"She's on her way up now from the yard where she's been preparing for that activity … Drilling will start within the third quarter," Lundetrae said. "We're in early Q3 now, so we're talking about this quarter."
This venture has cost more than $3 billion so far, as the New York Times recently reported, and is taking place in the Kara Sea. This is an area located off of the northern boundaries of Russia, and economically speaking, the discovery of oil will account for more than half of the export revenue of that country, according to the Times. Another country with a vested interest in this region is Canada, whose National Energy Board is currently debating whether or not to adjust their current rules that pertain to drilling in this area.
All parties involve will undoubtedly exercise the utmost of caution.