(PLO)- Despite a series of Western sanctions, Russia’s oil production capacity has recorded many records.
After Russia last week announced it would reduce oil production by 500,000 barrels per day in March in response to Western sanctions, many have expressed doubt whether Moscow really wants to choose the option. like that or not.
Because from the perspective of the West, Russia is buckling up once morest a series of economic sanctions ranging from a ban on technology exports to the recent European Union ban on most imports. the country’s oil, the firm Bloomberg news.
|
View of the Ashalchinskoye oil field owned by Russian oil and gas producer Tatneft. Photo: Sergei Karpukhin/REUTERS |
Even European Energy Commissioner Kadri Simson commented: “It is not voluntary, it is [Nga] forced. They cannot afford to maintain production volumes because they no longer have access to essential technologies.”
Russia’s oil production continues to “stay ahead”
However, the Russian data provide a completely different picture Bloomberg. Accordingly, Russian oil companies have conducted the most drilling in oil fields in a decade with little sign of international sanctions or the departure of some major Western companies. damaging upstream operations – term for the early stages of oil production including prospecting, exploration and production.
This has helped Russia restore oil production capacity in the second half of 2022 despite Western sanctions targeting this commodity.
Meanwhile, according to the data thatBloomberg obtained, Russian oil rigs drilled a total depth of more than 28,000 kilometers last year, the most in more than a decade. Oil wells also rose nearly 7% to above 7,800, with many major oil companies all posting better-than-expected 2021 results.
And the radio RT On February 14, it was reported that Russian Deputy Prime Minister Aleksandr Novak noted that Russia’s oil production amounted to 535.2 million tons in 2022, up 2% from the previous year. Oil exports also increased 7.6% to 242 million tons.
Last year, in order to redirect oil supplies to “friendly” countries, Moscow launched a project to increase shipping through the Kozmino oil port, the deputy prime minister said. As a result, exports to countries in the Asia-Pacific region increased by 42 million tons/year.
Since hitting a low of 10.05 million bpd in April 2022, two months following Russia launched a special military operation in Ukraine, Russia’s oil production has rebounded to around 10.9 million. b/d by the end of 2022 and staying near that level in January 2023.
 |
|
Oil tanker Vladimir Arsenyev at the Kozmino crude oil terminal, near the port city of Nakhodka, Russia on August 12, 2022. Photo: Tatiana Meel/REUTERS |
Factors that help Russian oil overcome the “storm of sanctions”
Firstlyleading international suppliers account for only 15% of the total services segment for Russia’s oil and gas industry by 2021, according to data from Vygon Consulting (in Moscow).
According to this data, the majority of the market in this segment comes from domestic oil producers such as Rosneft PJSC, Surgutneftegas PJSC and Gazprom group. As a result, already-exploited oil fields are generally unaffected by Western restrictions on high-tech equipment and services as well as advanced software.
Expert Vitaly Mikhalchuk, head of the research center for technology and business solutions, said that the main problem for Russia’s domestic oil industry is the possession of high-tech Western equipment and ” these problems are solved by importing through intermediaries in friendly countries or finding alternative suppliers in China”.
Monday, some major Western oil and gas service providers have not yet left and are still operating in Russia with certain restrictions such as SLB and Weatherford International Plc. However, SLB CEO Olivier Le Peuch in July 2022 explained that due to the company’s unique structure, it allows flexibility to operate in Russia while still complying with the sanctions of the Russian Federation. The West.
Weatherford International said last year that it had halted “new investment and new technology development in Russia,” but its most recent quarterly report still lists Russia as among the regions where the company is located. have activity.
Tuesday, Two giants in the oil and gas services industry, Halliburton and Baker Hughes, sold their businesses in Russia to local authorities before leaving the country. This allows those facilities to retain staff and expertise, said Victor Katona, crude oil analyst at market analysis firm Kpler (France).
 |
|
Despite a series of Western sanctions, Russia’s oil production capacity has recorded many records. Photo: Yegor Aleyev/TASS |
In the long term, might Russian oil be in trouble?
Although the impact of sanctions on upstream activity has been limited, Russia’s oil industry still faces other challenges. Most notably, Moscow does not yet have the ability to store oil in large quantities. This happened in the weeks immediately following the Russia-Ukraine conflict when companies not buying Russian oil caused inventories to build up forcing Moscow to cut production by regarding 500,000 bpd.
Meanwhile, Swapnil Babele, vice president of energy consulting firm Rystad Energy, said the technology export bans had obvious long-term effects on upstream activity.
Russia’s special military campaign in Ukraine has undergone the most profound change for the country’s oil industry since the fall of the Soviet Union. Large Western oil and gas groups such as BP Plc (UK), Shell Plc (link between the Netherlands and the UK) and Exxon Mobil Corp (USA) have canceled billions of dollars worth of investments in Russia. In addition, the EU also issued a “comprehensive export ban on equipment, technology and services for the Russian energy sector”.
Mikhalchuk also acknowledged the lack of technology for offshore oil and gas development and that some hard-to-recover reserves might become a problem. Following Russia’s annexation of the Crimean peninsula in 2014, an international ban on providing services to Russia’s shale, Arctic and deepwater oil and gas projects hampered oil exploration plans. offshore oil producer Rosneft in the northern Kara Sea.
However, since then, Russian oil and gas companies have also developed some specialized skills in this area, Katona said.
Even though technological bans make it more difficult to extract oil in reservoirs, Russia still has enough conventional reserves to sustain oil flows. According to expert Mikhalchuk, assuming oil production remains near current levels, by 2027, only 3% of that will depend on technologies that are currently difficult for Moscow to access.
While there is still no evidence that the price ceiling imposed by the West on Russian crude on December 5, 2022, creates problems for the Russian oil and gas industry as the country’s output remains stable. determined in the past two months. As for the price ceiling on Russian refined oil products issued by the EU earlier this February, it is too early to assess the full impact of this sanctions.
Russia wants to pivot oil flow to ‘friendly’ countries
Russian Deputy Prime Minister Aleksandr Novak said Moscow intends to shift exports of oil and petroleum products to “friendly” countries this year, increasing their share of total oil exports to 75-80%, according to RT.
Novak said that in the future, Russia is trying to pivot its energy exports to countries that have not imposed sanctions on Moscow or have not criticized its military campaign in Ukraine.
“We continue to look for new markets. This year, we plan to export more than 80% of our oil and 75% of our oil products to friendly countries,” Novak wrote in Energy Policy magazine on February 13.
Expert: Sanctions on Russian oil are not the ‘deadly blow’ as the West expected
(PLO)- Although it is expected to be a “deadly blow” to Russia’s key economic sector, sanctions on this country’s oil products have revealed many limitations.
VINH KHANG
