24.10.2020

Why Russia may lose the status as an oil exporter by 2035

Tailored to the needs of Russian oil refineries in these areas the total capacity of the routes in China and is limited in practice, not 100, but about 75 million tonnes per year after 2025. Moreover, the potential of oil production in East Siberia can be estimated at about 45 million tons per year, not more. In other words, to quickly replace the Iranians in the Chinese oil market in Russia does not work and never will.

Let’s start with the East, where the main buyer of Russian oil acts as China. It seems that the failure of the Chinese from importing Iranian oil should benefit Russia, which could increase the supply, but it prevents a number of circumstances. We will understand them more (sorry for the abundance of numbers).

The volume of oil supplies from Russia to Iran is really growing. In ten years it increased from 11.6 million tonnes to a record 57.9 million tons last year, and this year may reach 66.3 million t the Russian oil gets to the Chinese routes are the following: the withdrawal across the border from the main highway “Eastern Siberia – Pacific ocean” (ESPO), the annual capacity reached 30 to 33 million tons; the end point of the ESPO – the far East port of Kozmino, which in 2020 will be able to ship up to 36 million tons per year; transit through Kazakhstan, where the capacity of the route Orenburg – Pavlodar – Atasu – Alashankou is expected to increase to 18 million tons per year by 2025. In addition to the basic directions, up to 5 million tonnes can be shipped by tankers across the Black sea to the Chinese-owned Romanian factory in Constanta; but up to 2 million tonnes per year by tankers from the project “Sakhalin-1”; approximately 1 million tonnes a year by the sea from Novorossiysk trade schemes “substitution” and finally to 2 million tonnes by rail from Eastern Siberia.

It should be remembered that one of the strategic plants in China – maximum diversification of oil sources to ensure national energy security. Russia will simply not allow you to occupy a dominant position in the structure of suppliers, where she is responsible for 14% of China’s oil imports (Iran and Iraq before the sanctions was at 8.2%, Saudi Arabia with 13.4%, and Angola and 11.5%). The vacated niche will be distributed evenly among the other sources of supply.

Move to the West. Here, in addition to the steadily deteriorating quality of Urals blend has already been a trend to some reduction in exports. Production falls in the main source of Russian oil – Khanty-Mansi Autonomous district – 277,6 million tonnes in 2008, it dropped to 235,3 mln t in 2017 and continues to fall. Acting art “dosushivajut” remnants of reserves in the subsoil of the major discoveries was not for several decades, and up to 70% of the remaining inventory is tight oil, which requires production rates at $80 or more per barrel. Company throw all forces and means on the drilling fields already in operation, and to accelerate return of oil from old stocks at low cost, speeding up their destruction.

If you believe the head of “Rosgeologia” Roman Panov, in the present state of the industry Russia in 2035 will lose up to 40% of their neftedobycha potential. It should be noted that the government does not seriously intend to change this situation, except for a vague tax plans “incentive” (and when the tax rules and regulations of subsoil use are changed ten times per year, investors are reluctant to invest in long-term projects). Because of the dominance of “Rosneft” with its megalomania and other major players in the country remain unclaimed hundreds of small deposits – United States with their thousands of small companies willing to risk investment and innovation, open to all geological information and clear rules of business are a living reproach to our inert and brake the oil industry.

The assumption that the Russian company can quickly increase production – whether in order to replace the Iranians, whether at the behest of the Ministry of energy, which States that performs the joint will OPEC+, – have under itself no soil. Oil production in Russia reaches a peak, after which it is next year or the year after will commence downsizing for quite objective reasons. Twenty years later, our country may lose the status as an oil exporter.

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