Norway’s StatoilHydro and Russia’s Gazprom reach agreement

tankerA Memorandum of Understanding has been signed by StatoilHydro’s President and CEO Helge Lund and Gazprom’s Management Committee Chairman Alexei Miller stating that the two companies will cooperate in all activities in the northern regions of Norway and Russia. The document will help to diffuse the standoff between the two regional oil giants that has been simmering for several months.

The Norway Post states that the Memorandum foresees both companies jointly engaged in the geological exploration, development and production of hydrocarbon resources in the far north of Russia and Norway. Both parties will co-operate to locate and develop hydrocarbon deposits, along with developing new technology to produce and transport the resources.

The Memorandum is valid for three years, replacing the 2005 Memorandum of Understanding between the three companies that preceded it before Norway’s Statoil and Hydro merged. Gazprom’s CEO, Alexei Miller, said: “The development of the biggest of the projects – the Shtokman field – will become a starting point for the development of Arctic hydrocarbon reserves, a catalyst for the design and adaptation of technologies, which will help our companies operate efficiently in harsh northern climatic conditions.”

This renewed alliance between Norway and Russia appears to be the first tangible volley in the inevitable multinational battle over the Arctic’s underground resources. However, there are few other global firms that have the experience and tenure in the harsh northern environment to successfully tap these rich hydrocarbon deposits.