Oil production in Russia

Main article: Oil and gas production

Oil reserves

2022: Technologically recoverable oil reserves in the Russian Federation will last for 39 years - Rosnedra

Profitable oil reserves in the Russian Federation will last for 33 years, and technologically recoverable - for 39 years, the head of Rosnedra said in September 2022.

2021: Rosnedra: Oil in Russia will last for 21 years

In mid-September 2021, the Federal Agency for Subsoil Use (Rosnedra) estimated oil reserves in Russia.

Profitable reserves [oil is enough] for about 20-21 years, - said the interim head of the department Yevgeny Petrov (quoted by TASS Information Agency of Russia).

According to him, this period will increase as technologies for hard-to-recover oil reserves develop. The head of Rosnedra added that the most promising Russian region for exploration of oil and gas reserves is Western Siberia.

Here we still work and work. Here is the potential for work for many, many more years, - he pointed out.

The development of hydrocarbon fields in Eastern Siberia, according to him, is still unprofitable due to the lack of the necessary infrastructure.

In April 2021, the previous head of Rosnedr, Yevgeny Kiselev, told Rossiyskaya Gazeta that oil reserves in Russia would last for 58 years, of which profitable - only for 19 years, and gas reserves - for more than 60 years.

Minister of Natural Resources and Ecology Alexander Kozlov in May 2021, in a conversation with RBC, reported that at the then level of production of Russian oil reserves would be enough for 59 years, and natural gas - for 103 years.

According to Westwood Global Energy, 70% of the world's discovered oil and gas reserves are in Russia. To support production growth and a significant amount of competitive oil exports until 2035, Russian companies must grow reserves of at least 10.4 billion tons, the study says.

In September 2021, oil and gas condensate production in Russia jumped. The growth is recorded, in particular, against the background of the fact that key oil companies increased production in accordance with the terms of the OPEC + deal. Another reason may be recovery from a fire at Gazprom's plant near Novy Urengoy^[1]

2019

Sixth country in the world in confirmed oil reserves

The geological reserves of oil and condensate in the Russian Federation in 2019 increased by almost 2 billion tons.

The increase in oil and condensate reserves in Russia due to geological exploration at the end of 2019 by the amount of all categories (A + B1 + C1 + B2 + C2) is tentatively estimated at 1.952 billion tons, and by gas - 1.354 trillion cubic meters.

Oil companies overestimate reserves

A significant part of the oil and gas reserves in Russia, which are reported by raw materials companies and which are put on the state balance sheet, is not confirmed as a result of revaluation, exploration and production.

This was announced in May 2020 by the Accounts Chamber in a report on the state of the country's mineral resource base in 2015-19. Oil and gas companies tend to overestimate explored deposits, reporting to the state on natural resources. On average, every year Russia writes off the reserves of hydrocarbons that turned out to be "fake" from the state balance sheet in almost the same volume as it pumps out of the bowels annually.

In total, since 2016, oil and condensate reserves of 2.278 billion tons have been recognized as not existing in reality, which is almost five annual production volumes.

Over the same period, due to unconfirmation, 6.041 trillion cubic meters of gas had to be written off - more than nine annual production volumes.

Oil Production Volumes

2023

Oil and condensate production in Russia decreased to 10.78 million barrels per day

Oil and condensate production in Russia in 2023 averaged 10.78 million barrels per day (bpd), which is 0.29 million bpd less than a year earlier. Such data were published by the Organization of Petroleum Exporting Countries (OPEC) on January 17, 2024.

The report notes that the data take into account voluntary obligations of the Russian Federation to reduce oil supplies to foreign markets.

Russia in March 2023 approved a voluntary reduction in oil production by 500 thousand barrels per day from February. Later, Deputy Prime Minister Alexander Novak said that the country had reached this level since May. Also from August 2023, Russian companies began to reduce oil exports, from September to December the volume of reductions amounted to 300 thousand barrels per day.

In November 2023, Russia extended its participation in a voluntary reduction in production. The agreed restrictions will extend to the end of 2024.

In 2024, as OPEC expects, the production of liquid hydrocarbons in Russia will practically remain at the level of 2023, having decreased by only 10 thousand b/d, to 10.77 million b/d.

Experts predict that in 2024, in addition to increasing production at some fields, it is planned to launch new projects of Rosneft, Russneft, Lukoil, Gazprom, Neftisa and TenderResource, but this growth will be offset by a decrease in production at mature fields.

Minister of Energy RFNikolai Shulginov at the end of December 2023 said that the expected volume of oil production in Russia by the end of 2023 is 523 million tons or slightly less. In October of the same year, Deputy Prime Minister Alexander Novak announced a forecast for 2023 of 525-527 million tons of oil per year. In 2022, Russia mined 535 million tons. Thus, in 2023, the indicator may decrease by 2.2%.^[2]

Record oil drilling rate - 28,100 km in 11 months

The boom in oil drilling Russia in proves resilience to Western Moscow sanctions. In 2023, the country set a record for drilling in the post-Soviet space. According to industry data, in the Bloomberg first 11 months of 2023 Russia , oil producing wells with a total depth of 28,100 kilometers were drilled.

The rapid growth in activity occurred simultaneously with the restoration of the volume and value of Russian oil exports. A high level of activity is necessary to maintain oil production.

From January to June 2024, drilling rigs in Russia drilled 14.7 thousand km of production wells, which is 6.6% more than planned and 8.6% more than in the same period in 2022, according to data obtained by Bloomberg.

In 2022, "a record was set for drilling wells in the post-Soviet space, and, taking into account the data obtained, I expect a new maximum," said Ronald Smith, an oil and gas analyst at BCS Global Markets in Moscow.

Production growth to 1.5 million tons per day

Russian oil production in February 2023 for the first time reached the pre-sanction level and may exceed the figure of February 2022, and relative to January, production for the month increased by almost 2%, to more than 1.5 million tons per day.

2022

Russia drilled a record number of wells over the year and increased oil production by 2%

Oil production in Russia in 2022 amounted to 535 million tons, which is 2% more than a year earlier. Almost all the largest oil companies in the country have increased production, Kommersant notes in a publication dated January 10, 2023.

The highest production growth rate in 2022 showed Surgutneftegas"," which ranked third in terms of production, overtaking Gazprom neft"." In second place in oil production was Lukoil"," increasing production by 6%, to 81 million tons.

It is also reported that one of the largest Russian companies Rosneft, which, together with Gazprom Neft, fell under anti-Russian sanctions, reduced production by 2% in 2022, to 178.5 million tons.

Oil workers in Russia drilled wells to a total depth of 28 thousand km in 2022, which is the highest figure in ten years. The total number of wells in Russia increased by 7% in 2022 and exceeded 7,800, and most key oil companies surpassed the results of 2021, Bloomberg reports.

Deputy Prime Minister Alexander Novak previously admitted that oil production in Russia could decrease due to the price ceiling introduced by Western countries. The Russian authorities refused to supply the states that would approve it, not only oil, but also other energy resources. Western countries agreed on an oil price ceiling in early December 2022. The restrictions entered into force on December 5, the price was limited to $60 per barrel.

The EU embargo may have a greater impact on production in 2023, and alternative oil supply channels will most likely develop, but they will take time to build, notes Maxim Malkov from Kept.

According to the newspaper, in 2022 the volume of Russian oil refining decreased by almost 4%, to 275 million tons. Basically, the fall fell in the spring of 2022, while then it was the additional loading of the refinery that allowed oil companies to maintain production volumes, despite export difficulties. In the context of high oil prices, refining was stimulated by significant damper payments from the budget, which in 2022 amounted to about 2.2 trillion rubles.^[3]

Production decline of just 2 % in 11 months despite best efforts by US and allies

Numerous attempts by the West to prevent Russia profits from oil trade have failed, writes. In Bloomberg November, the Russian Federation produces almost the same as at the beginning of the year.

So, in the first half of November, Russian oil production rose to a nine-month high, 10.85 million barrels per day. If this growth continues until the end of the month - and so far there is nothing that could prevent this - Russia will produce only 200 thousand barrels per day less than the level of the beginning of the year, that is, the decrease will be less than 2%.

As a result, according to Bloomberg, oil production in Russia at the end of November increased to 10.9 million barrels per day, while in January daily production was 11.03 million barrels per day.

The recovery in Russian production is also confirmed in the OPEC report.

So the average volume of oil and gas condensate production in Russia was 11.1 million barrels per day, where 9.7 million barrels per day (hereinafter MB/d) and 1.3 MB/d of gas condensate, while the volume of production before the conflict in Ukraine was no more than 11.35 MB/d. Losses do not exceed 300 thousand barrels per day.

At the same time, the volume of production in 2022 may be even higher than 2021 (10.96 mb/d versus 10.8 mb/d) due to the protracted post-covid recovery under the OPEC quota agreement.

However, the European embargo can "squeeze" about 900 thousand barrels of Russian oil from the market - production in 2023 may amount to 10-10.1 mb/d, dropping to the level of 2010.

The maximum oil production in Russia was in 2019 - 11.7 mb/d, in 2020 - 10.7 mb/d, i.e. the current oil production is 6.3% lower than the maximum production in Russia, and in 2023 it could potentially be 14-15% lower than the peak.

In absolute and relative comparison, the 2023 production shock may be comparable to the 2020 crisis, when Russia lost almost 1 million barrels, but this is only a forecast.

The blow goes to the main sales market, which amounted to over 70% in the structure of oil and petroleum products exports before the conflict in Ukraine.

Decline and recovery of production amid conflict in Ukraine

According to preliminary media reports, citing sources in the Central Control Department of the Fuel and Energy Complex, in September 2022, 44.1 million tons of oil from gas condensate were produced in Russia, which is equivalent to 10.78 barrels per day (0.5% of yoy) against 10.59 million bs in August. Dynamics for 9 months 2022: + 2.8% yoy - MMI.

2021: Oil production in Russia increased 2.2% to 524.05 million tons

The volume of oil and gas condensate production in Russia in 2021 reached 524.05 million tons, an increase of 2.2% compared to 2020. This was reported by the Central Dispatch Department of the Fuel and Energy Complex (TsDU TEK, a branch of the Federal State Budgetary Institution "REA" of the Ministry of Energy of Russia).

According to the statistics provided, the average daily oil production in the Russian Federation in 2021 amounted to 10.52 million barrels. The amendment for the leap year has been taken into account, noted in the Central Office of the Fuel and Energy Complex. The leaders in oil and gas condensate production are as follows:

• Rosneft in 2021 produced 170.73 million tons (in December - 14.24 million tons)
• LUKOIL - 75.73 million tons (6.83 million tons);
• Surgutneftegas - 55.45 million tons (5.07 million tons);
• Gazprom Neft - 38.57 million tons (3.29 million tons);
• TATNEFT - 27.83 million tons (2.44 million tons);
• Bashneft - 13.77 million tons (1.5 million tons);
• Slavneft - 9.85 million tons (1 million tons);
• Novatek - 8.05 million tons (666.92 thousand tons);
• RussNeft - 6.68 million tons (589.75 thousand tons).

The TsDU TEK noted that Bashneft's production is still taken into account separately, despite the fact that since 2016 the company has been a member of Rosneft.

Other subsoil users, including Gazprom and joint ventures with foreign investments, produced 85.88 million tons of oil and gas condensate in 2021 (7.7 million tons in December). Separate data on Gazprom are not provided.

By the end of 2021, the operators of the production sharing agreement produced 16.89 million tons of crude oil (in December - 1.36 million tons).

Opening Anna Morina, an analyst at the bank, says that 2021 has become an outstanding year for oil and gas markets. The expected recovery from a slump in demand covid in 2020 exceeded all expectations, and supply constraints further fueled prices.^[4]

2020: Reduction of oil production in the Russian Federation by 8.6%, to 512.68 million tons - TsDU TEK

In 2020, the volume of production of crude oil with gas condensate in Russia decreased by 8.6% compared to 2019 and amounted to 512.68 million tons. This figure has become the lowest over the past nine years and approached a ten-year minimum: in 2010 it amounted to 512.3 million tons. At the same time, in 2019, Russia set a record for oil production for the entire post-Soviet period - 568 million tons of oil and condensate.

The average daily oil production in 2020 was at the level of 10.27 million barrels (adjusted for leap year). This was reported by the Central Dispatch Department of the Fuel and Energy Complex (TsDU TEK, a branch of the Federal State Budgetary Institution "REA" of the Ministry of Energy of Russia).

In December, oil production fell more than in the whole year. During this month, 42.46 million tons of oil and gas condensate were produced in Russia, which is 11% lower than in December 2019. Average daily production was recorded at 10.04 million barrels.

According to experts, in 2020, oil production was reduced by all the largest companies in the Russian Federation:

• Rosneft - by 8% to 179.96 million tons;
• LUKOIL - by 11% to 73.43 million tons;
• Surgutneftegas - by 10% to 54.75 million tons;
• Gazprom Neft - by 1% to 38.92 million tons;
• TATNEFT - by 13% to 26.01 million tons.

Infoline analysts called the drop in indicators in the Russian oil and gas industry in 2020 expected. After worrying sentiment in the first half of the year, the market made attempts to recover only in the second half of the year, giving some hope for recovery and allowing OPEC + to soften its production quota in August. However, with the onset of winter, oil production by Russian companies did not improve, experts say.

In early December, the parties to the OPEC + agreement agreed to increase oil production by only 0.5 million barrels. per day from January 2021 (it was originally planned that production would increase by 2 million barrels^[5]

2019: New daily production record

2018: Russia concede leadership

2017:546 million tonnes (-0.2%). List of largest production companies

Oil production in Russia in 2017 amounted to 546.7 million tons (-0.2%).

For the period January-December 2017, oil production:

• Rosneft - 210.8 million tons (-0.3%),
• Lukoil - 82.2 million tons (-1.6%),
• Surgutneftegas - 60.5 million tons (-2.1%),
• Gazprom Neft - 59.9 million tons (+ 3.8%),
• TATNEFT - 28.9 million tons (+ 0.9%),
• Novatek - 11.8 million tons (-5.5%),
• Bashneft - 10.4 million tons (-3.4%),
• Russneft - 7.0 million tons (+ 0.2%),
• Neftegazholding - 2.1 million tons (-7.5%).

In 2017, the average price of Urals increased by 26.6% compared to 2016 ($53.03/bbl. in 2017, $41.9/bbl. in 2016).

In 2017, 284.3 million tons of oil (- 0.3%) were processed in Russia.

In December, Russia produced an average of 10.582 million barrels of oil per day, in November - 10.582 million, in October - 10.529 million.

Oil production in September-December 2017 decreased by 2.2% compared to the same period last year. Following the drop in production, exports also declined (-2.4% for September-December 2017). This decline is primarily associated with the fulfillment of obligations under the OPEC + agreement to reduce production and monitor oil exports. The current agreement was extended in November for the whole of 2018.

OPEC countries produced 32.416 million barrels of oil per day in December, 32.416 million in November, and 32.560 million in October^[6].

2015: New record for production

The absolute maximum in production in the USSR was shown in 1988 at 11.07 million barrels per day. Then, in addition to the RSFSR, such republics as the Kazakh SSR, the Azerbaijan SSR, the Turkmen SSR and the Uzbek SSR also made a significant contribution to production.

In September 2015, Russia set a new record for oil production for the post-Soviet period - the production level, according to the Ministry of Energy of the Russian Federation, amounted to 10.74 million barrels per day. This is 0.4% (30 thousand barrels per day) higher than in August 2015. The previous maximum was shown in March 2015 at 10.71 million barrels per day^[7].

In general, Russia's September oil production figures became the highest in the entire period after the collapse of the USSR.

According to Deutsche Bank experts cited by the Wall Street Journal, according to the results of 2015, Russia is likely to also set a new record for the average annual level of production: according to oil production forecasts in 2015, it will amount to 10.6 million barrels per day compared to the previous post-Soviet record of 10.58 million barrels per day, which was shown in 2014.

2013: Russia is the largest oil producer in the world

In 2013, Russia was the world's largest oil producer, ahead of Saudi Arabia, its closest competitor, by a million barrels per day.

In 2013, Russia set a new annual record for oil production, surpassing all the best industry performance since the early 1990s. This was stated by the Minister of Fuel power engineering specialists Russia and Alexander Novak. According to the minister, the volume of production amounted to 523.2 million tons, which is 4.5 million more than in 2012^[8]

Novak noted that according to the forecast of the socio-economic development of the country, it assumed oil production at the level of 505-510 million tons. He added that the increase last year was ensured, among other things, thanks to amendments to the tax legislation of Russia, stimulating the extraction of hard-to-recover reserves.

One of the components of this growth was the work of Rosneft at the Vankor field in the Krasnoyarsk Territory, where the company managed to significantly increase production. In addition, Gazprom began to produce more oil raw materials.

Cost of production

2022: Cost increased by 19% to 24.6 thousand rubles per ton

The cost of oil production Russia in 2022 increased by 19% compared to 2021 and amounted to 24.6 thousand rubles per ton. This is evidenced by the data Rosstat released in February 2023.

It is also noted that in the fourth quarter of 2021 its cost was 23.1 thousand rubles per ton, in the first quarter of 2022 - 33.1 thousand rubles per ton, in the second quarter the cost of oil production decreased to 25.2 thousand rubles per ton, in the third quarter - to 21.5 thousand rubles per ton, in the fourth quarter - to 18.6 thousand rubles per ton.

According to Kommersant, citing statistics from the department, taking into account the average dollar exchange rate in 2022 of 67.46 rubles/$ 1, the cost of producing a ton of oil in 2022 amounted to $365 per ton, or about $50 per barrel against about $38 per barrel (dollar exchange rate 73.65 per ruble) in 2021.

With world quotes of about $85 (by February 24, 2023), this is not the worst result, but if the price begins to fall, then even despite the correction of the cost of production, some subsoil plots will go beyond the profitability of their development, writes Rossiyskaya Gazeta.

The main reason is the general deterioration of the structure of oil reserves and the increase in the share of hard-to-recover reserves (TRIZ), says Valery Andrianov, associate professor at the Financial University under the Government of the Russian Federation. In the all-Russian production, the share of TRIZ is still relatively small - 7.2%, but it is constantly growing. And the potential volume reaches 200 billion tons of oil. TRIZ production requires new technologies and equipment, which also affects operating costs.

The main reason for the growth of the ruble cost of oil production in Russia remains the devaluation of the Russian currency, said Oksana Lukicheva, an analyst for commodity markets at Otkritie Investment. In her opinion, despite the increase in production costs and an increase in the tax burden, the rate of weakening of the exchange rate allows you to cover these costs and maintain high profits.^[9]

2019

Bloomberg based on IFRS 2019 data. calculated the cost of producing a barrel of oil from the three largest Russian companies Lukoil:,,. For Rosneft Gazpromneft all three, it does not exceed $12 per barrel.

For Rosneft, this figure is $11.3 per barrel ($3.8 OPEX and $7.5 CAPEX), for Lukoil - $10.2 per barrel ($3.7 OPEX and $6.5 CAPEX), for Gazprom Neft - $9.8 per barrel ($3.8 OPEX and $6 CAPEX).

Oil prices

Main article: Oil prices

Transportation: Role of Transneft

The gas reform, which made Gazprom a monopolist in the field of gas exports, has simplified relations between it and other gas companies: since the mid-2000s, the latter have to sell fuel to Gazprom, and it, using its system of trunk gas pipelines, sends it for export. The oil industry also has its own pipeline monopoly - Transneft, but it does not buy the oil itself from producers, but only takes a transit fee (January 2013). On the one hand, this allows oil workers to get additional profit, on the other, it forces them to look for customers on their own.

Since the main production assets of Russian companies are located in the Tyumen region and the Khanty-Mansi Autonomous Okrug, that is, thousands of kilometers from the main export routes, fuel is delivered to the border mainly through Transneft pipeline systems. According to 2011 data, of all Russian oil exports of 242 million tons, Transneft pumped almost 208 million tons through its pipes, that is, 86 percent of the total.

The rest of the company's raw materials are delivered to the border on their own. As a rule, we are talking about those cases when oil workers manage an export corridor - for example, a port. So, in January 2013, Rosneft sells part of the oil from the Timan-Pechersk oil and gas province through its transshipment complex in Arkhangelsk, and fuel from the Sakhalin-1 project is exported through the port of De Castries (Khabarovsk Territory). It belongs to the consortium of developers of Sakhalin-1, that is, Rosneft, the American ExxonMobil, the Japanese Sodeco and the Indian ONGK. Lukoil exports more than five million tons of oil per year through the marine terminal in the village of Varandey (Timan-Pechora) and the port of Svetly (Kaliningrad region)^[10]

Oil exports

Main article: Oil exports from Russia

Oil traders

Russian oil is delivered every year to dozens of countries of the world - from the states of Western Europe to Japan and the United States. True, in most cases, delivery to end consumers is not the concern of the companies themselves. The fact is that when it comes to exporting oil to foreign countries, they prefer to work with traders who buy fuel from them and sell it on the market themselves. This reduces the profitability of the business, but insures Russians from emergency situations. For example, if somewhere in Europe an oil refinery that used Russian oil has closed, then this becomes a headache for a trader, not a producer.

Litasco (Lukoil)

The choice between trader and direct supply is relevant for companies that do not have their own traders. Thus, Rosneft created its trader registered in Switzerland only in 2011, but Lukoil has been working through its 100% subsidiary Litasco for more than ten years (January 2013). At the same time, Litasco's trade volumes are not limited to oil and oil products of Lukoil: according to official data of the company, in 2011 it purchased 20 million tons of oil and 37 million tons of oil products^[10]

Sunimex (Sergey Kishilov)

It is even more difficult to get information about traders independent of mining companies. Even publicly traded companies should not officially publish the structure of export supplies. In turn, traders themselves are also in no hurry to make at least any reporting available. For example, the trader Sunimex occupies a leading position in the supply of Russian oil through the Druzhba pipeline to Germany, but the details of its business remain in the shadows. The only thing about Sunimex can be said for sure is that it is managed by entrepreneur Sergei Kishilov.

Gunvor (Gennady Timchenko)

Even the largest trader of Russian oil entering ports, the company, until recently Gunvor (Gunvor) , reports on the results of its activities only when it needs it and only in the volumes that it considers sufficient. It is known that Gunvor sales in 2010 amounted to 104 million tons of oil equivalent, but what is the share in them Russia is not clear.

The data for 2010 poorly reflect the current state of affairs also because the situation in the market has changed dramatically. If earlier the main export volumes of oil from Rosneft, Surgutneftegaz, TNK-BP were sold by Gennady Timchenko's company, then in 2012 it unexpectedly lost several tenders in Russia. In September 2012, Reuters reported that the volume of trade in the Russian Urals oil brand fell several times from Gunvor, as its competitors won the tenders of Rosneft, Surgutneftegaz and TNK-BP: Shell, Vitol and Glencore.

Gunvor, however, explained that they did not leave the Russian market, but simply changed the concept of business: if earlier the company was interested in long-term contracts, now the trader buys Russian oil on the open market, where sometimes the cost of raw materials is even lower than under long-term contracts. Rosneft, on the contrary, is profitable to conclude agreements for several years in advance and receive an advance payment for them. These funds can be used to pay for TNK-BP shares and, thus, not to take an expensive loan^[10]

Glencore

Before the New Year 2013, Gunvor was dealt another blow: Glencore and Vitol agreed on a long-term contract with Rosneft for 67 million tons of oil. The Russian company undertakes to supply these raw materials to traders within five years. In other words, Glencore and Vitol have contracted a fifth of Rosneft's annual exports going through Transneft.

Already in 2013, it turned out that the shares between Glencore and Vitol would be distributed unevenly. According to the same Reuters agency, Glencore will receive up to 70 percent of the total oil, which will make it one of the largest or even the largest trader of Russian oil.

Will there be new traders

The chances that some new trader will begin to trade in Russian oil in the near future are small: companies working through their own subsidiaries will try to develop them first of all, and the rest have been cooperating with current market participants for many years and trust them quite well. At the same time, in the most conditional rating of the largest traders, changes may occur, especially if we consider that competition will continue to grow at least due to a decrease in the amount of exported oil.

Direct contracts

Until 2013, Rosneft was engaged in the supply of oil through the Druzhba pipeline to Germany for a joint venture between BP and Rosneft, but since 2013 the value of this company should increase. So, in February 2013, it became known that Rosneft signed a direct contract for the supply of about six million tons to Poland annually. Similar agreements have been signed with Total and Shell and another is expected to be signed with Eni in the near future. True, the volume of purchases of Total, Shell and Eni is not indicated in official messages.

Not only market leaders, but everyone else is gradually switching to direct contracts. Thus, the consulting company Argus in January 2013 reported that TATNEFT had agreed with the Polish Grupa Lotos on direct supplies to the Gdansk refinery. True, this information was not officially confirmed.

Export duty and economic dependence on oil

The export duty on oil in 2012 was kept at about $400 per ton of oil. This means that due to exports, the state budget received only on the duty on oil to foreign countries approximately 84 billion dollars (2.5 trillion rubles). For comparison, the total revenues of the federal budget (including other export duties and taxes) in 2012 amounted to 12.858 trillion rubles.

At the same time, the Russian economy is much less dependent on oil exports than most countries - the largest oil exporters in the world.

Oil and Gas Equipment

Main article: Oil and gas equipment

History

2023

Investments in the oil industry in Russia over 3 years increased by 22.7% and reached 2.7 trillion rubles

Investments in the oil industry in Russia in 2023 reached 2.7 trillion rubles, which is 22.7% more than in 2020. Such data at the end of January 2024 were provided by the First Deputy Minister of power of the FPM Sorokin.

He did not provide data for 2021-2022. Vedomosti notes that earlier the Ministry of Energy of the Russian Federation disclosed the amount of capital expenditures for the production of vertically integrated oil companies (VINK). In 2022, such investments increased by 26.3% compared to 2021 - to 1.82 trillion rubles. In 2020, investments were measured at 1.3 trillion rubles.

Investments in the oil industry in Russia in 2023 reached 2.7 trillion rubles

According to the presentation of Pavel Sorokin, investments in oil refining in Russia reached about 200 billion rubles, doubling compared to a year ago.

Industry experts interviewed by the newspaper emphasize that the Russian oil industry, under OPEC + restrictions, seeks to maintain its shape and production volumes, including by consistently increasing investments in logistics and import substitution. In addition, hydrocarbon reserves in Russia are actively moving into the category of difficult to access, one hundred forces oil workers to invest more and more in new technologies.

Igor Yushkov, a leading analyst at the National Energy Security Fund, believes that the volume of investments that were in 2023 is enough to maintain the country's production at 520-530 million tons. In 2024, according to the expert's forecasts, the volume of investments in the oil industry may "grow slightly" by the previous year. The analyst explains that the quality of the resource base in Russia, as in other countries, is deteriorating. Thus, with the same production volumes, more drilling is required and, as a result, more serious investments, he added in a conversation with Vedomosti^[11]

Russia says it will oppose plan to phase out fossil fuels

In its October 2023 address to the UN climate body, Russia said: "We oppose any provision or outcome that discriminates in any way or calls for the phasing out of any particular energy source or fossil fuel" - FT.

Moscow's stance is sharply different from that of the US, which says it needs to rapidly reduce emissions from fossil fuels in order to achieve zero energy consumption by the middle of the century. According to the US Energy Information Administration (EIA), Russia remains the third largest oil producer, despite illegal sanctions imposed by the United States and its allies.

Oil and gas deposits found in Chechnya

New hydrocarbon deposits were discovered on the territory of the Chechen Republic. The first discovery in 30 years was made by geologists of the Rosneft Scientific Institute together with scientists from Grozneftegaz. This was announced to the press service of Rosneft on April 3, 2023.

They noted that experts have identified promising intervals of Maikop deposits at the Khayan-Kortovskoye field, which are at a late stage of development. In the course of well count tests in complex geological and technical conditions, water-free oil fountains at a rate of more than 40 m3/day were obtained. The discovery of deposits is an important stage for replenishing the mineral resource base of Grozneftegaz, Rosneft said.

The company said in a press release that "more than 2.5 million tons of oil and 1 billion m3 of gas have been supplied to the state balance sheet of reserves." As the company notes, increasing the efficiency of replenishment of reserves is one of the key elements of the Rosneft-2022 strategy. It is planned to replenish "at least one hundred percent of the produced hydrocarbons."

At the end of March 2023, Rosneft announced the high efficiency of geological exploration in 2022, thanks to which a significant increase in reserves was recorded - 159.3 billion barrels in oil equivalent in category AB1C1 + B2C2. The replenishment of production with an increase in reserves last year exceeded 100% - the desire for this indicator is one of the key elements of the Rosneft-2022 strategy.

By 1991, Chechnya was a major center of the oil industry. In the republic, oil was produced and processed. Three oil and gas processing plants worked in Grozny, there were several oil research institutes and a specialized university.^[12]

2022: Surge in pipe production by 21.1% to 6.94 million tonnes

In 2022, 6.94 million tons of pipes for the oil and gas industry were manufactured in Russia, which is 21.1% more than a year ago (5.73 million tons). In the period 2018-2022. the market showed an increase of 10.5%, calculated in the research agency BusinesStat. The data was published in June 2023.

According to experts, in 2022, despite the beginning of the sanctions crisis, domestic demand for pipes for the oil and gas industry grew due to long contracts for the programs of oil and gas companies, and the implementation of a number of infrastructure projects.

According to a study released in June 2023, the volume of steel pipe imports for the oil and gas industry to Russia is insignificant and has been declining in recent years. The reduction of imports is facilitated by the development of domestic production, including premium quality pipes and large diameters. Thanks to this, it became possible to replace most of the pipes of foreign origin with their own products. In 2022, the reduction in supplies from abroad was also associated with the introduction by the EU countries of a ban on the export of steel pipes to Russia, logistical difficulties and a significant increase in prices.

According to analysts, the production of oil and gas pipes in Russia is aimed primarily at domestic consumption. Among the major projects: Gazprom's Power of Siberia gas pipeline, designed to supply gas to the countries of the Asia-Pacific region; the Vostok Oil project of Rosneft - the development of oil fields in the Krasnoyarsk Territory; preparation for the development of the Power of Siberia-2 project. Gazprom's program for gasification of Russian regions for 2021-2025 is also in effect, projects are being carried out to repair and replace already functioning oil and gas pipelines to improve their condition.^[13]

2020: Chubais called oil a "dead horse"

On May 18, 2020, the magazine Forbes published an interview with the chairman of the board of the state corporation Rusnano"." Anatoly Chubais He, in a conversation with a journalist, announced a strategic risk for, Russia which is dependence on oil prices.

There is a well-known cowboy saying: if a horse dies, you need to get off it, - said the head of Rusnano, explaining the comparison with the prospect of making money on oil in the near future.

According to him, oil prices, even according to optimistic forecasts, will not rise above $40 per barrel, which means that making money on the sale of this raw material, as before, will not work. In 2020, the budget is calculated based on the price of $42.5, but the country cannot be exposed to strategic risk due to such a structure of the economy, Chubais said.

This does not mean that it is necessary to close the West Siberian oil field. But about the strategy, of course , you need to make this decision for yourself. The sooner we begin to turn off this path, the more we will remove strategic risks of a state scale from the country, "he explained.

According to the board of directors of "Rusnano," the basis for Russia's exit from the crisis should be the development of an innovative economy, and the state is obliged to reconsider its attitude towards it.

That's it, guys! It's good to talk about getting off the oil needle. We have been hearing you get off for 15 years, "he said, but at the same time called oil and gas the" ridge "of the Russian economy, which accounts for 20% of GDP, 40% of the budget, 60% of exports.

He added that the COVID-19 coronavirus pandemic and oil shock create "an ideal storm - a combination of completely different processes that ultimately give synergy that further strengthens each of them." If there was just an oil shock, then exporters would be bad, and importers would be good. But everyone shakes very hard with the coronavirus, Chubais said.^[14]

See also

• Petroleum products in Russia
• Russian economy

Notes