The Russian oil industry is not able to develop and maintain oil production at new fields under Western sanctions – domestic production technologies are too outdated, and the lack of Western developments threatens existing and future projects. Bloomberg writes about this with reference to a study by the consulting company Yakov and Partners, the successor to McKinsey, which left the Russian market due to the war in Ukraine.
The company expects that without the replacement of Western technologies, oil production in Russia will fall, by 2030 it will be reduced in the range from 5 to 30% and will amount to 409 million tons per year, or about 8.2 million barrels per day. For comparison: before the war, Russia produced about 11 million barrels of oil per day.
“The lack of domestic high-tech oil services creates risks for 20% of production by 2030,” said Andrey Streltsov and Gennady Masakov, analysts at Yakov & Partners.
The heirs of McKinsey believe that a significant part of traditional oil wells will not suffer as a result of the exodus of foreign companies, but in Russia there are fewer and fewer of them, and their resource is limited. For the development of new deposits, the reserves of which are considered hard-to-recover, Russian technologies are not enough. The company cites data according to which about 52% of projects using hydraulic fracturing technology depend on foreign technologies from "unfriendly countries". The situation is even more aggravated when it comes to offshore production, here the share of foreign technologies already reaches 80%, and in the case of floating drilling rigs, even 90%.
The consulting company notes that Russia's traditional oil reserves are gradually running out, which will force extractive companies to switch to hard-to-recover fields, however, a lack of competencies and technologies can lead not only to a reduction in production, but also to the loss of some reserves. Yakov & Partners has calculated that about 1,500 drilling rigs are currently in use in Russia, 40% (600 units) of which are already seriously outdated. Streltsov and Masakov come to the conclusion that for the further successful work of the industry, it will have to significantly upgrade the fleet of drilling rigs.
The Russian authorities earlier announced that in March the total oil production in Russia would be reduced by 500,000 barrels per day. Moscow claims this is a planned cut needed to stabilize the international oil market. Western experts believe that Moscow is cutting oil production due to the fact that it cannot sell it to its customers due to sanctions.
