HH When Will Russia Run Out Of Oil?

On a global level, 2015 and 2016 marked the lowest level of new conventional oil discoveries since 1952. In 2016, only of conventional oil were discovered, roughly 45 days of global crude consumption or 0.2 percent of global proved reserves. Globally, exploratory drilling fell by almost 20 percent in 2015 and fell even further in 2016.

Siberia oil

Russia's exploration activities, which were hit not only by plummeting oil prices but also by a targeted sanctions regime, suffered a double blow during this period. In 2015, new hydrocarbon discoveries were made in Russia, three of them in the Baltic Sea. In 2016, oil and gas companies in Russia discovered 40, however, the 3P reserves of the largest among them, Rosneft's Nertsetinskoye, amounted to 17.4 million tons. This stands in stark contrast with pre-sanction period achievements, for instance, 2014's largest find, Pobeda, is believed to contain 130 million tons of oil and 0.5TCm of gas. 

Graph 1. Russia's Oil Production 1970-2020 and Russia's Deep-Hole Oil & Gas Exploration Drilling.

Source: Russian Central Bank, IEA, Russian Statistics Agency. 

It is only logical that against such depressive trends, that people start to question the sustainability of Russia's current oil-producing renaissance (Graph 1). When will Russia run out of oil? Were Sheikh Yaki Zamani's "Stone age" simile to materialize, would Russia still be among the top producers when oil started its descent towards obsolescence? 

The Ministry of Natural Resources and Environmental Protection of Russia states that not accounting for new discoveries, current oil reserves in Russia stand at 29 billion tons and under current consumption rates (its 2P gas reserves' depletion would come about in more than 160 years). To this end, it would like to implement business-easing measures, e.g.: facilitate the issuance of licenses and to increase the size of the allotted subsoil block to a maximum of 500 km2 (which would mean a fivefold increase compared to existing regulations). The Ministry's stimulating measures, however, should not obfuscate the fact that Russia still has vast amounts of untapped reserves waiting to be discovered. But where? 

1 2 3 4
View single page >> |

Legal Disclaimer/Disclosure: This piece is an advertorial and has been paid for. This document is not and should not be construed as an offer to sell or the solicitation of an offer to ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.