Russian oil industry: main problems and development

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

In the current situation on the international markets, the oil and gas industry of Russia is the driving locomotive of the entire economy and at the same time demonstrates the most stable growth rates of all sectors of the national economy. It is thanks to proceeds from oil and gas trade that a positive foreign trade balance has been formed for several years in a row, and companies for the extraction and transportation of hydrocarbon raw materials are included in the TOP of the largest taxpayers in the Russian Federation. But, according to many experts, the potential of the industry is not fully revealed, and its functioning can and should be taken to a fundamentally new level.

General provisions

According to geologists, approximately 13% of the world's oil reserves are in the Russian Federation. Therefore, the Russian oil industry has a great influence on the global market, forms prices for hydrocarbons.

240 entities operating in the field of oil production are registered in Russia. However, only eleven of them produce more than 90% ofthe entire volume of "black gold". The lack of competition in the domestic market gives rise to a number of problems.

Geography of oil fields in Russia

The main oil-bearing regions of the country were explored back in the distant 60s. The main facilities of this industry are located on the territory of Western Siberia. They provide about 70% of the total production and are the backbone, the basis of the Russian oil industry. A significant contribution to oil production is made by deposits in the Volga-Ural region. But this basin has already exhausted its potential and in the near future geologists predict a significant reduction in production.

Promising oil-bearing regions are the vast plains in the northern part of the country, certain territories in the Far East, as well as offshore coastal zones. The development of these fields is not actively conducted due to the difficulties in the delivery of heavy equipment and its placement. The Russian oil industry is in dire need of increasing oil production. To do this, it is necessary to explore and actively develop new deposits.

Mission and strategic goals of the Russian oil industry

To ensure economic stability and high rates of growth in the well-being of the Russian population, the industry must:

• meet the demand of foreign and domestic markets;
• continue to be a source of significant and stable revenues to the budget in the form of taxes and state-owned enterprises;
• be a weighty argument in solving importantgeopolitical issues in the interests of the state in the international arena;
• stimulate the development of other sectors of the economy, such as engineering, transport, high technology, services, etc.

Assessment of undiscovered oilfields

The cost of producing one barrel of oil in Asian countries is very low. The largest and richest deposits are concentrated in Saudi Arabia (about a quarter of the world's reserves).

If we are talking about the already known and exploited fields, then they must meet the demand for oil for at least another 60-70 years. But Russia has incredible potential.

According to the conclusion of experts, colossal oil reserves have been mothballed in the bowels of Russia, which have not yet been explored. These reserves exceed all deposits known in the country almost several times.

Promising oil-bearing places are the territories of Eastern and Western Siberia, the underwater shelves of the seas and oceans. In recent years, offshore deposits have been developed at an accelerated pace. And if initially equipment and vessels were purchased at a very high price from foreign manufacturers, today domestic shipyards have begun to build modern platforms for drilling rigs. This marked the renaissance of shipbuilding and brought it to a new technological level.

Main tasks for the near future

To achieve strategic goals, you must:

• carefully and rationally use stocks of raw materials;
• increaseefficiency at all stages of the oil production and transportation process;
• increase the depth of processing;
• actively develop new fields, primarily offshore, as the most promising;
• diversify supplies and increase presence in new markets for oil products;
• development in Russia and abroad of transport oil pipeline infrastructure;
• building new pipelines and moving away from dependence on the political leadership of unfriendly countries.

Construction of new processing plants

During the entire existence of Russia since the collapse of the USSR, not a single new oil refinery has been built. At the same time, old enterprises are morally and physically obsolete, unable to process oil at the level of world standards. Therefore, Russia, instead of selling abroad a product with a high added value, is forced to sell its property for a penny. Spot modernization of refineries does not give a tangible effect. This is perhaps one of the main problems of the Russian oil industry.

The program for re-equipment and construction of new plants can radically change the situation. Moreover, it is necessary to build not only giants, but also small science-intensive enterprises in remote and hard-to-reach areas of the country.

Where to build new factories

Refineries should be located close to the extraction sites of raw materials, which will save quite a lot of money ontransportation of crude oil to the place of its processing, increase the income of interested companies, reduce the price of petroleum products for the final buyer.

But this rule is not followed. And there are objective reasons for that. So, for example, in the regions in the north of the country, where severe winter reigns almost all year round and there is no transport infrastructure, the construction of a plant will not be justified, because it will be very problematic to deliver processed products to the consumer.

And one more argument against the construction of large plants in the immediate vicinity of the field: sooner or later, the oil reserves in the field will be depleted, and people will leave the city, only a ghost plant will remain, in which huge investments are buried.

Quality problem

Every year, the demand of petrochemical and chemical industry enterprises for initial high-quality raw materials is growing at a rapid pace. And, despite the active introduction of energy-efficient and resource-saving technologies into the technological process, the consumption of raw materials will continue to grow. At the same time, the requirements for the quality of raw materials are being tightened.

It is necessary to legislate the requirements for the chemical composition of fuel and semi-finished products. So, for example, it is necessary to ensure that the permissible sulfur content is 0.2% by weight. A similar rule exists in many countries. This will significantly reduce harmful emissions and improve the environmental situation.

Optimistic forecasts for the future

Most analystsagree that total production volumes will not fall. However, due to some systemic problems of the oil industry in Russia, and the world as a whole, there will be no abnormal growth in oil production. Thus, in the near future, the demand for energy resources will continue, which will ensure the harmonious development of other industries of the Russian Federation and an increase in the living standards of citizens.

The decline in oil production in the main oil-bearing regions of the country is more than offset by the exploration and development of new fields on the ocean shelf, on Sakhalin and in the Far Eastern territories of the country. A preliminary expert assessment of reserves gives every reason to believe that new fields will be able to meet the needs of the domestic market and export hydrocarbons to other countries for more than a decade.

Measures to improve the efficiency of oil production

The Russian oil industry lags behind other countries in terms of its indicators and technological equipment. Scientists have proposed a number of measures, the implementation of which will bring the industry to a qualitatively new level and significantly increase its competitiveness and investment attractiveness. Here are just the main ones:

• introduction of scientifically based well drilling methods developed in specialized research institutes;
• the use of more modern equipment and technologies, which will allow development to a greater depth and increase the efficiency of oil production;
• active attractionforeign investment and technology in the Russian oil industry by creating favorable business conditions;

International cooperation

China is one of the leaders in the processing of crude oil. And yet, for many decades now, the United States has been the leader (in processing, not in production). The Russian oil industry has a much more modest scale, but still occupies a prominent place and plays an important role in the world oil market. For a long period, while the USSR existed, the domestic oil industry was in a kind of isolation and developed independently. With the opening of the borders, cooperation in this area with other countries began to actively develop.

The role of exchanging experience and attracting foreign specialists to work in the oil and gas industry is constantly increasing. This allows you to effectively invest in existing scientific developments, rather than spending a lot of time and money on research that has already been carried out in other countries and has concrete results.

Attracting and cooperating with foreign companies not only opens up access to the achievements of modern science and technology, but also allows you to significantly accelerate the introduction of developments into production.