Russia revises estimates for oil and gas reserves upwards
Melting Arctic ice makes Russia’s fossil fuel reserves more accessible but poses a threat to pipeline infrastructure in the region. According to the latest estimates, the country’s oil and gas reserves will last for 59 and 103 years respectively.
Russia has enough extractable oil to maintain production for another 59 years and gas reserves that can be exploited for another 103 years, says bneIntelliNews citing Minister of Natural Resources and Environment Alexander Kozlov. The minister’s forecast slightly exceeds previous estimates made by his predecessor Sergey Donskoy in 2017, which put the reserves of oil at around 57 years.
Kozlov noted that his estimates reflected “only a general balance”. “There are fields that are being unlocked, while there are fields that are yet to reach a full load. Anyway, we have to improve geological exploration, including exploration in remote areas. We have the goal of loading the Northern Sea Route, hydrocarbons will become its basis,” said the minister. The route shortens transport links between Europe and Asia significantly, so Russia is actively developing it.
Most of Russia’s oil production has historically been concentrated in West Siberia, while East Siberia, which has a very similar geography and is considered to have significant untapped reserves, remains underdeveloped. The Arctic region, which holds 25% of Russia’s oil and 72% of gas reserves, is becoming increasingly accessible thanks to global warming. However, there are some obstacles, such as pipeline infrastructure, which is well developed in West Siberia but insufficient in East Siberia and the Arctic. US sanctions on advanced oil extraction technology exports to Russia also hinder exploiting new fields. Meanwhile, global warming itself is not only making more fields accessible but also threatening the existing pipeline network. Melting permafrost can make the pipelines sink into a quagmire if the region’s year-round solid ground turns into mud.
According to Kozlov, it will be difficult to maintain production costs of hard-to-recover oil. “The price of the end product exerts pressure on the industry, while foreign partners do not allow the Russian oil industry to use some technologies. Still, the government helps the companies by taking on some costs, including the cost of geological exploration, so that the companies spend more on production,” he said adding that more geological surveys were needed to firm the estimates up, particularly in remote areas.
Earlier, some experts stated that Russia had already passed its oil production peak. They consider that it will be difficult to restore production on some of the oilfields idled due to an OPEC+ output cut deal, so they may have to be written off.