Full-scale commercial production of unconventional oil from the Bazhenov suite deposits in Western Siberia will require investments from the industry of 900 billion rubles over the next 10 years. This is stated in a study by Oil Resource.

According to the study, oil production at the Bazhenov suite* fields is possible at a price of Russian Urals oil of $75 per 1 barrel. At this price, companies will need to invest a total of 90 billion rubles per year, according to the calculations presented in the study. This will make it possible to commission more than 7000 new wells and reach the production level of up to 10 million tons per year. Full-scale commercial production may start in 2031, experts predict.

The study notes that companies are increasingly developing technologies for the development of hard-to-recover reserves (HTR) against the background of depletion of existing fields. At the same time, oil workers are trying to use various Russian technologies: both the hydraulic fracturing method, widely used in the US for shale oil production, and different thermal and physical-chemical methods for enhancing oil recovery.

Due to tougher sanctions imposed by unfriendly states, which lead to higher costs, Russian oil companies are forced to intensively upgrade equipment and optimize production, analysts say. One of the areas of optimization for companies should be more active use of HTR at existing fields. The advantages of such HTR are good research, ready infrastructure and “huge potential” production volumes, the study said.

In general, according to Oil Resource analysts, if a number of promising technologies are used and Russian oilfield services are developed (or if sanctions on oilfield services of Western vendors are lifted, which is less likely), Russian oilmen can put into operation various categories of HTR in 4-5 years, which will make it possible to produce an additional 25-30 million tons of oil annually. This will practically exclude the scenario of production decline in the country against the background of traditional reserves reduction. To realize these plans, according to experts, it is necessary to develop HTR at large watered fields in Western Siberia.

According to the authors of the study, multifluid thermal technology (MTT) has the greatest prospects for the development of reserves in the Bazhenov suite. It can be used to produce oil from depths of up to 4 km. MTT was originally developed for commercial development of the Bazhenov suite.

At the same time, the review notes that full-scale development of the Bazhenov suite may require tax incentives. In particular, the Additional Income Tax (AIT) regime may be utilized for this purpose. The AIT regime in Russia became operational in 2019. Unlike the Mineral Production Tax (MPT), which depends on extraction volumes, it is levied on the financial result - the income from sales of raw materials less extraction and logistics costs. It was initially introduced for four groups of sites. The first and second groups mainly include fields in Eastern Siberia and the Caspian Sea, the third group includes mature fields in Western Siberia, and the fourth group includes new fields in the same region. Subsequently, a fifth group appeared as part of the “Arctic preferences”.

* The Bazhenov suite is a group of oil-bearing formations in Western Siberia with an area of about 1 million square meters, identified by Fabian Gurari in 1959. The name comes from the village of Bazhenovo in Sargatsky District, Omsk Oblast. As of 2020, the reserves of the Bazhenov suite are held by about 100 fields in Western Siberia. According to Rosnedra, the recoverable reserves of the Bazhenov suite amount to approximately 350 million tons. At the same time, more than 97% of reserves are located within the KhMAD, and the remaining reserves are located in the YNAO and the Tyumen Region. There are also fields with reserves of the Bazhenov suite in the Omsk and Tomsk Regions. Gazprom Neft estimates that the geological resources of the Bazhenov suite deposits may amount to 18-60 billion tons of oil. In 2019 (the latest public data available), production from the Bazhenov suite was about 550,000 tons, for a total Russian oil production of 560.2 million tons.

vedomosti.ru