October 25, 2022

Russia has four main oil production regions:

  • Western Siberia: the latest and most productive basins
  • Volga-Ural and North Caucasus: one of the oldest regions with declining production
  • Sakhalin: includes 2 oil projects with total production 0.65 MM Bbl/d
  • Timano-Pechora: one of the oldest areas.

Russia also has several other oil potential areas, including Eastern Siberian, but doesn’t have any significant development.

Russia produces mostly conventional oil and also has a very large resource of Tight Oil however, there currently is no active exploration. The largest potential Tight Oil formation in Russia is The Bazhenov Formation or Bazhenov Shale. It covers most of Western Siberia and some areas in the Kara Sea. Bazhenov Shale is a source rock for conventional oil fields in Western Siberia. In 2013, Wood Mackenzie estimated that Bazhenov Shale had an oil resource of 2 trillion barrels. Rosneft estimated the recoverable resource of Bazhenov Shale is 22 B Bbl. Incorrys believes that development of Bazhenov Shale will not proceed in the near future due to the high cost and lack of technology in Russia.

Russia has two offshore projects: Sakhalin and Prirazlomnaya. Production from the Prirazlomnaya platform in Timano-Pechora is 0.1 MM Bbl/d. The Prirazlomnaya field, discovered in 1989 and producing 2013, has reserves of 0.6 B Bbl. Oil from the platform is transported by ice class shuttle tankers. No other offshore development is planned in Russia.

A significant portion of Russian oil production, particularly in Timano-Pechora and Volga-Ural regions, are coming from mature fields where production from many wells is close to their economic limit. If older wells in such fields have to be shut-in, it will be impossible or uneconomical to restart these wells due to technical issues with well completion. Therefore, if Russia loses market share but can sell some amount of oil, it cannot restore production later without developing new fields. However, these new fields will be in remote regions and will require substantial investments to develop.

The largest newly discovered cluster of fields is Vostok Oil with expected production of 2 MM Bbl/d. The fields are located in the Russian Artic region with oil transportation planned utilizing ice-class tankers. The project plans include drilling 6,500 wells and constructing 5.5 thousand km of pipelines. The original full cycle cost estimate was USD 35-40. Incorrys estimates that the development cost will be at least $150B based on the current USD/RUB exchange rate, which makes development of these fields unfeasible in the near future.

Russian Oil Production by Region