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Europe: Quality of Russia's crude reserve base falling: state study

https://www.chemnet.com   Apr 27,2011 Platts
The quality of Russia's crude oil reserve base is declining and may lead to a drop in output, according to a natural resources ministry study published late Monday.

Russia, the world's largest oil producer, produced over 500 million mt (10 million b/d) in 2009 but only has economically accessible reserves enough to maintain that output level for another 13-15 years, the study said.

The study was focused on the Russia's use of its mineral resources in 2009.

"Russia has no more than 30% of 'flowing' oil reserves; the remaining 70% of reserves is made up of very heavy, viscous and hard-to-recover crude," the study said.

The study found that the oil recovery factor in discovered fields had declined in the last 25-30 years and has settled at around 34-36%, with some fields with hard-to-recover reserves having a recovery factor as low as 10%.

Most of Russia's oil proved and probable oil reserves were discovered in the Soviet era in West Siberia, where production at brownfields is in decline.

The new oil province of East Siberia has not met expectations to date, with "concentrations of reserves there extremely low," according to the ministry study, adding that the region's discovered reserves might optimistically produce 30 million-40 million mt/year.

Russia has prioritized the development of East Siberia, building the 600,000 b/d East Siberia-Pacific Ocean pipeline and offering export duty exemptions to encourage oil producers to develop the new, oil-rich but remote oil province.

The study also noted that in 2009 exploration drilling dropped by 46% year-on-year to 464,400 meters, down from 851,700 in 2008.

Many Russian oil companies reduced their exploration budgets during the international financial crisis and have since restored them to at or near pre-crisis levels.
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