Abstract
The importance of oil and gas industry for Russia is hard to overestimate. Continued leadership in hydrocarbon production and exports are cornerstones for Russian economic and political prowess as well as energy and social security. The key to sustainability of oil and gas production is, first and foremost, the resource base. In this study the authors attempted to analyze production capacity of the contemporary hydrocarbon production projects, both brownfield and greenfield, using the Hubbert linearization approach. The development of several major greenfields and the successful production maintenance at the developed fields provided Russia with record levels of production, even compared to the period of the USSR and created a potential for further production growth up to 2020. However, by 2025 this potential will be exhausted and only tapping into hard-to-recover reserves and Bazhen formation will be able to slow down the inevitable decline in production. This, however, will largely depend on active domestic development of new production technologies. The situation in the gas industry appears more favorable. Massive reserves of conventional gas, primarily in the Yamal Peninsula, provide the means to increasing annual production to over 1 trillion cubic meters. At the same time, even such a base of new reserves is not capable of completely replacing the phasing out of giant deposits of Nadym-Pur-Taz, which leads to the subsidence of production capacity beyond 2035 and the need to develop new and more complex resources.
Highlights
Extraction and exports of petroleum and natural gas are the key branches of Russian industry and economy, providing up to half of state budget revenues, ensuring energy security and acting as a geopolitical leverage
To access the long-term prospects of Russian oil and gas production in this study the authors carried out a projectby-project analysis of the country’s hydrocarbon resource base, its changes and challenges, determine production capacity and formulate adaptation strategies to achieve the optimal utilization of these capacities
The Hubbert linearization is an empirical regularity that assumes the existence of four distinct successive lifecycle stages of each hydrocarbon production project, the boundaries of which are determined by the depletion rate of initial recoverable reserves (IRR)
Summary
Extraction and exports of petroleum and natural gas are the key branches of Russian industry and economy, providing up to half of state budget revenues, ensuring energy security and acting as a geopolitical leverage. As of late the decline in the productivity of giant conventional fields of Western Siberia [1], the increasingly complex geology and geography of promising reserves [2], against the background of economic instability and technological sanctions of Western countries [3] casts doubt on the ability of the country to sustain production. The cornerstone of hydrocarbon production is, the resource base which, in large part, defines output from the onset of fields’ development. To access the long-term prospects of Russian oil and gas production in this study the authors carried out a projectby-project analysis of the country’s hydrocarbon resource base, its changes and challenges, determine production capacity and formulate adaptation strategies to achieve the optimal utilization of these capacities
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