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Russian oil production may be at risk in medium term – OIES

Oil&Gas Materials 30 March 2022 15:07 (UTC +04:00)
Russian oil production may be at risk in medium term – OIES
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, March 30. Russian oil production may be at risk in the medium term, Trend reports with reference to Oxford Institute of Energy Studies (OIES).

“Oil production outlook varies by location and timescale. As with Gazprom, Rosneft and the other Russian oil majors are more than capable of maintaining output at traditional Russian oilfields in the heartlands of European Russia and West Siberia. Equally, the domestic oil service sector has developed an ability to carry out the drilling, logging and other infield activities that are needed to maintain production at current levels from conventional fields. As a result, the major risk to short-term Russian oil production is a lack of market for Russia crude and oil products,” OIES said in its recent report.

The Institute analysts note that if import bans become more widespread and effective then oil production could be shut in, although it should be born in mind that in a liquid global market it is likely that alternative buyers would be found if suitable discounts are offered, as is already being seen.

“However, an increasing proportion of Russian oil production is coming from hard-to-recover reservoirs, offshore, enhanced oil recovery, and other more difficult sources such as tight oil and shale. It is here where production might be at risk in the medium term, as new developments become more remote and the technology required to develop more complex fields is in shorter supply as western oil companies and, perhaps more importantly, service companies end new investment and start to exit the country.

This leads to the conclusion that short-term Russian oil production is not at risk from a technical perspective, but the medium-term prospects may be. The Ministry of Energy forecast was for production to stay flat at 550 million tonnes per annum, equivalent to just over 11 million b/d, while the analysis showed that production from existing fields in production, condensate, and approved new fields could see output fall to around 8.5 million b/d in 2030 if hard-to-recover, offshore, enhanced oil recovery, and other more complex reserves were not developed,” the report reads.

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