Russian oil and gas industry

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Fuel resources provide energy not only for the entire industry of any country in the world, but also for almost all spheres of human life. The most important part of the fuel and energy complex of Russia is the oil and gas sector.

The oil and gas industry is a generalized name for a complex of industrial enterprises for the extraction, transportation, processing and distribution of the final products of oil and gas processing. This is one of the most powerful sectors of the Russian Federation, largely forming the country's budget and balance of payments, providing foreign exchange earnings and maintaining the national currency.

Development history

The beginning of the formation of the oil field in the industrial sector is considered to be 1859, when mechanical drilling was first used in the United States for oil production. Now almost all oil is produced through wells with only a difference in the efficiency of production. In Russia, the extraction of oil from drilled wells began in 1864 in the Kuban. The production debit at that time was 190 tons per day. With the aim ofto increase profits, much attention was paid to the mechanization of extraction, and already at the beginning of the 20th century, Russia took a leading position in oil production.

The first major areas for oil extraction in Soviet Russia were the North Caucasus (Maikop, Grozny) and Baku (Azerbaijan). These dwindling old deposits did not meet the needs of the developing industry, and significant efforts were made to discover new deposits. As a result, several fields were put into operation in Central Asia, Bashkiria, Perm and Kuibyshev regions, and the so-called Volga-Ural base was created.

The volume of oil produced reached 31 million tons. In the 1960s, the amount of black gold mined increased to 148 million tons, of which 71% came from the Volga-Ural region. In the 1970s, deposits in the West Siberian basin were discovered and put into operation. With oil exploration, a large number of gas deposits have been discovered.

The importance of the oil and gas industry for the Russian economy

The oil and gas industry has a significant impact on the Russian economy. Currently, it is the basis for budgeting and ensuring the functioning of many other sectors of the economy. The value of the national currency largely depends on world oil prices. The carbon energy resources produced in the Russian Federation make it possible to fully satisfy domestic demand for fuel, ensure the energy security of the country, and also make a significant contribution to the global energy and raw materials economy.

The Russian Federation has a huge hydrocarbon potential. The Russian oil and gas industry is one of the world's leading ones, fully meeting domestic current and future needs for oil, natural gas, and their products. A significant amount of hydrocarbon resources and their products is exported, providing replenishment of the foreign exchange reserves. Russia ranks second in the world in terms of liquid hydrocarbon reserves with a share of about 10%. Oil reserves have been explored and developed in the bowels of 35 constituent entities of the Russian Federation.

Oil and gas industry: structure

There are several structural core processes that make up the oil and gas industry: the oil and gas production, transportation and processing industries.

• Hydrocarbon production is a complex process that includes field exploration, well drilling, direct production and primary purification from water, sulfur and other impurities. Production and pumping of oil and gas to the commercial metering unit are carried out by enterprises or structural subdivisions, the infrastructure of which includes booster and cluster pumping stations, water discharge units and oil pipelines.
• Transportation of oil and gas from production sites to metering stations, to processing plants and to the end consumer is carried out using pipeline, water, road and rail transport. Pipelines (field and main) are the most economical way to transport hydrocarbons, despite the very expensivefacilities and services. Oil and gas are transported by pipelines over long distances, including across different continents. Transportation by waterways using tankers and barges with a displacement of up to 320 thousand tons is carried out in intercity and international communications. Rail and trucks can also be used to transport crude oil over long distances, but are most cost effective on relatively short routes.
• Processing of crude hydrocarbon energy carriers is carried out in order to obtain various types of petroleum products. First of all, these are different types of fuel and raw materials for subsequent chemical processing. The process is carried out at the refineries of the refinery. The final products of processing, depending on the chemical composition, are divided into different grades. The final stage of production is the mixing of various obtained components in order to obtain the necessary composition corresponding to a certain brand of oil product.

Russian fields

The Russian oil and gas industry includes 2352 oil fields under development. The largest oil and gas region in Russia is Western Siberia, it accounts for 60% of all extracted black gold. A significant part of oil and gas is produced in the Khanty-Mansiysk and Yamalo-Nenets Autonomous Okrugs. Production volume of the product in other regions of the Russian Federation:

• Volga-Ural base – 22%.
• Eastern Siberia – 12%.
• Northern deposits – 5%.
• Caucasus - 1%.

The share of Western Siberia in natural gas production reaches almost 90%. The largest deposits (about 10 trillion cubic meters) are in the Urengoyskoye field in the Yamalo-Nenets Autonomous Okrug. Gas production in other regions of the Russian Federation:

• Far East - 4.3%.
• Volga-Ural deposits - 3.5%.
• Yakutia and Eastern Siberia – 2.8%.
• Caucasus - 2, 1%.

Oil and gas processing

The challenge is to turn crude oil and gas into marketable products. Refined products include heating oil, gasoline for vehicles, jet fuel, diesel fuel. The refinery process includes distillation, vacuum distillation, catalytic reforming, cracking, alkylation, isomerization and hydrotreating.

Natural gas processing includes compression, amine treatment, glycol drying. The fractionation process involves the separation of the liquefied natural gas stream into its constituent parts: ethane, propane, butane, isobutane and natural gasoline.

The largest companies in Russia

Initially, all major oil and gas fields were developed exclusively by the state. Today, these objects are available for use by private companies. In total, the oil and gas industry of Russia has more than 15 large producing enterprises, including the well-known Gazprom, Rosneft, Lukoil, Surgutneftegaz.

The largest Russian companies in the field of gas production and processing are Gazprom and Novatek. In the oil industry, Rosneft has a leading position in the market, and Lukoil, Gazprom Neft and Surgutneftegaz are also leading companies.

Oil and gas industry overview of the world situation

In terms of the number of proven oil reserves, the Russian Federation ranks sixth in the world. Proved reserves are those that can be produced using modern technologies. Venezuela is the leader in the world. The number of oil reserves in this country is 298 billion barrels. The proven reserves of natural gas in Russia amount to 47.6 trillion cubic meters. This is the first indicator in the world and 32% of the total world volume. The second gas supplier in the world is the countries of the Middle East.

The world's oil and gas industry allows us to solve important economic, political and social problems. Given the favorable situation on the world energy markets, many oil and gas suppliers are making significant investments in the national economy through export proceeds and are demonstrating exceptional growth dynamics. The most obvious examples are the countries of South-West Asia, as well as Norway, which, with low industrial development, thanks to hydrocarbon reserves, has become one of the most prosperous countries in Europe.

Prospects for development

The oil and gas industry of the Russian Federation largely depends on the behavior of the main competitors in the market for production: SaudiArabia and USA. By itself, the total amount of hydrocarbons produced does not determine world prices. The dominant indicator is the percentage of production in a single oil country. The cost of production of 1 barrel in different leading countries in production varies significantly: the lowest in the Middle East, the highest in the United States. When the volume of oil production is unbalanced, prices can change both in one direction and in the other.