Abstract
The main topic of Kryukov’s chapter is the economic foundation of liquid hydrocarbon production in Russia and its availability for exports to the EU. This chapter shows the basic trends in Russian hydrocarbon production and the steps and measures required to develop production and to export the products. Development of mature areas is a natural source of exports westward, while new fields and new areas are located in the north-east of Russia, closer to the Asia-Pacific market. At the same time, northern and central Arctic fields are close to both the European and Asian markets and the exact itinerary depends on transportation facilities and price conditions. Both the volume and type of hydrocarbons exported depend not only on production itself but also on consumption within Russia and on public policy. All these factors and conditions are subjected to analysis and discussion.
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Notes
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BP Statistical Review of Energy.
- 2.
GazpromNeft Great Acquisition: http://www.vedomosti.ru/companies/news/37768351/velikoe-priobretenie-gazprom-nefti.
- 3.
Arctic Victory; Prospects of Northern Offshore Fields Development //Arcticheckaya pobed: perspectuvy osvoenia shelfa severnykh morey. 16th October 2014. URL: http://glasru.ru/arkticheskaya-pobeda-pe.rspektivyi-osvoeniya-shelfa-severnyih-morey/.
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The company’s budget at the end of 2014 for 2015 was balanced at a price level of 80–85 USD./bbl.
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Ministry of Energy—Results for 2012.
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Rosneft is following the traditional approach to developing the oil business, getting access to new areas (such as the Arctic and big ‘strategic’ fields) with the support of the state, and using this support to gain access to new markets and new sources of financing (see the chronology of Rosneft-China deals below).
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The sanctions which are now imposed on Russia are influencing not only access to technology and equipment but also to capital markets and financing in general. They have put a significant brake on the Russian oil production potential. The restrictions on access to capital markets are the following:
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A US prohibition of debt with a maturity of longer than 90 days to Rosneft, Novatek, GazpromNeft and TransNeft;
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An EU ban on selected financial instruments with maturity of more than 30 days in the case of Rosneft, GazpromNeft and TransNeft.
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Restrictions on access to equipment, technology, and services for use in selected project categories:
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Sanctions target deepwater, Arctic shelf, and shale oil projects (impacting all Russian oil industry projects in these areas).
Uncertainty over the precise scope of various sanctions itself acts as a significant brake on international investment and joint ventures.
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- 11.
Federal Customs Service.
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The main directions of Russian fiscal policy for 2015 and the 2016–2017 period. Ministry of Finance of the Russian Federation. URL: http;//www.minfin.ru/common/upload/library/…/ONBP_2015-2017/pdf.
- 13.
Investment in exploration and production in the oil sector in 2012—according to MinEnergo—was more than 25 billion USD.
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Tailoring can produce a longer period of production despite a maturing and changing resource base.
- 15.
Интерфакс “ «Газпром нефть» купила недропользователя Приразломного за 2,7 млрд рублей” [“Gazpromneft buys Prirazlomnoye’s subsoil user for 2.7 billion roubles”, Interfax], April 25, 2014.
- 16.
Aatle Staalsen. Новопортовское месторождение подстегнёт арктические перевозки нефти [“The Novoportovskoye field is to increase oil traffic in the Arctic” by Aatle Staalsen]. http://barentsobserver.com/ru/energiya/2013/02/novoportovskoe-mestorozhdenie-podstegnyot-arkticheskie-perevozki-nefti-13-02.
- 17.
“Планы “Газпромнефти” - “Ведомости” [“Plans of Gazprom Neft”, Vedomosti], September 16, 2013. http://www.vedomosti.ru/newspaper/article/530041/vkratce#ixzz34WiRqjXh.
- 18.
“There are three main ways in which the oil and gas industry can meet the growing demand for oil: finding new resources; continuing to develop unconventional resources, such as shale and oil sands; and increasing the amount recovered from existing resources. The third of these might not enjoy the high profile of the first two, but it could make a huge contribution. In 2011, then-president of the Society of Petroleum Engineers Alain Labastie wrote: “The current ultimate average recovery factor for oilfields, on a worldwide basis, is about 35 %. This means that about two-thirds of the oil that has been discovered is left within the reservoir. We have under our feet, in well-known locations, enormous prospects for booking new reserves. Increasing the average ultimate recovery factor from 35 to 45 % would bring about 1 trillion barrels of oil!”
URL: http://www.bp.com/en/global/corporate/press/bp-magazine/innovations/the-recovery-factor.html
The Oil recovery factor (ORF) is the volume of oil extracted compared with the initial volume of reserves; in the 1960s the ORF in the USSR exceeded 46 %; now it varies between 31 and 33 % in Russia. Because of frequent changes in the reserves, the ORF can also vary substantially. ORF changes characterise technologically driven changes in oil field development strategies. Among the most successful in this respect are the Norwegian shelf areas, where the ORF is steadily growing despite maturing fields and it is estimated to be more than 50 %.
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Tatarstan is located in the European part of Russia and is the starting point of the Druzsba export-oriented trunkline, which ends in Austria and Germany.
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An increase in the East Siberia—Pacific Ocean (ESPO) pipeline flows was a key factor, as the Kozmino terminal alone handled 21.3 Mt in 2013.
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Kryukov, V.A. (2016). Russia’s Oil Dilemmas. Production: To Go North-East or to Go Deep? Exports: Is a Compromise Between Westward and Eastward Directions Possible?. In: Bardazzi, R., Pazienza, M., Tonini, A. (eds) European Energy and Climate Security. Lecture Notes in Energy, vol 31. Springer, Cham. https://doi.org/10.1007/978-3-319-21302-6_5
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