Shale oil in Russia – commercial catalyst required

• Main Author: Henderson, J
• Format: Article in Journal/Newspaper
• Language: unknown
• Published: 2015
• Subjects: Arctic; Bulwark; Greenfield; Siberia
• Online Access: https://ora.ox.ac.uk/objects/uuid:63956e2d-0767-4139-87f7-6664fa37d76e

As Russia enters a period when oil production from its traditional heartland in West Siberia has plateaued and could go into decline, the search has begun for new sources of output that can help to maintain the country’s output above 10 million barrels per day (mmbpd). It is vital that this level is maintained, in order to allow crude oil and oil product exports (which contribute around 45 per cent of Russia’s budget revenues) to remain as a vital bulwark of the country’s economy. To this end, the Russian authorities have been encouraging the country’s major oil companies to explore new greenfield regions – such as East Siberia, the Black and Barents Seas, and the Arctic offshore – in the hope that major new production areas can be developed. These prospects are relatively long term, however, with major increases in oil production unlikely for a decade or more, meaning that a medium-term solution still needs to be found. Unconventional oil would appear to be just such a solution especially as, in a recent assessment, the United States Geological Survey (USGS) estimated that Russia has the largest potential shale oil resources in the world, with its 75 billion barrel estimate being almost equivalent to the country’s current proved conventional oil reserves. The Russian authorities have also been expressing growing confidence in the potential from tight and shale reservoirs located in West Siberia and European Russia, with production expectations set as high as 1.5mmbpd by the Ministry of Natural Resources. The key question, of course, is whether this potential can be realized. It is becoming increasingly clear that the answer to this will be less to do with geology and technology than with the commercial environment in Russia and the corporate mind set of the companies that currently control the majority of the relevant licences.