The Ministry of Economic Development endorsed Irkutsk Oil Company’s joint implementation project
Reduction of air emissions and concern for the environment has always been the focus of Irkutsk Oil Company.
The Company’s oil production at Yaraktinsky field generates associated petroleum gas (APG), which is partially used as fuel for heating and power generation, but is partially flared. In 2009 with the support of the European Bank for Reconstruction and Development (EBRD), Irkutsk Oil found a way to utilize associated gas – re-inject it into the resorvoir and began building the required gas cycling facility in order to reduce emissions from gas flaring and later sell emission reduction units (ERUs).
Selling ERUs was made possible by the 1997 Kyoto Protocol – a protocol to the United Nations Framework Convention on Climate Change, aimed at fighting global warming. Russian Federation ratified provisions of the protocol in 2005, and as a result, Russian companies became able to work on joint implementation projects on greenhouse gas emissions reduction and sell emission reduction units .
After completing the first stage of its gas cycling facility , Irkutsk Oil Company applied to Sberbank of Russia (which is appointed as the "operator of carbon units" by the Russian Government) on April 14, 2012 with its joint implimintation project on greenhouse gas emissions reduction. After examination, the project was forwarded to the Ministry of Economic Development, and was approved by the order of the Ministry of Economic Development of Russia № 277 dated May 16, 2012, along with a list of other companys’ projects.
According to the project, Irkutsk Oil Company shall be entitled to sell quotas for reduced carbon dioxide emissions to the European company Stitching Carbon Purchasing Intermediary, in compliance with the forward contract for purchase of emission reduction units which was signed in 2009.
All funds received from the sale of ERUs are planned to be reinvested into environmental projects of Irkutsk Oil Company.
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