Innovation and Efficiency. Key to Stability for West Siberian Conventional Resources

By Joe Parson, June 25, 2014

to find new, easier to produce oil. Near 40 percent of Rosneft’s production is now outside of West Siberia. 

For its part, LUKOIL produces 46 percent of its oil outside of West Siberia, largely in Timan Pechora and in the Volga-Urals regions. LUKOIL bases its strategy on its ability to re-stimulate, with their own EOR techniques, fields abandoned by other producers. Other independents, such as Tatneft, Bashneft and Surgutneftegaz, have also applied some of their own proprietary technologies to increase well productivity. Russian majors are now also beginning to exploit tight reservoirs and some shale oil.

Russia can certainly maintain a comfort zone – a so-called production plateau – or even move beyond, but only by further advancing its EOR agenda if this production is to come from conventional fields. Assuming use of the appropriate technologies, experts estimate that conventional oil can sustain West Siberia for another seven to 10 years.

But after that, Siberian oil will need to come from unconventional sources; hence the emphasis – and tax breaks – currently being applied to development of unconventional reservoirs in major basins in the Khanty-Mansiysk Autonomous District. It is hoped that such federal assistance will enable unconventional oil production to hit planned levels of 1 million barrels per day in the next five to seven years, experts agree. 

Russian operators are finding efficiencies also by investing in SCADA technologies to help prevent waste and mitigate risk to new assets. There are plenty of foreign vendors eager to sell this technology into Russia. But Russian companies are intent on developing their own systems for the most part. At the recent Neftegaz international exhibition in Moscow, representatives of Russian ESP manufacturer Borets were exhibiting comprehensive SCADA solutions that run the gamut of downhold sensors for measuring well pressure, temperate and fluid leakage to full integration into a corporate IT system for well data analysis. Another Neftegaz exhibition, Germany’s Leoni, says they have contracts with both state and private Russian producers to update cable systems that transmit downhole data to surface equipment for eventual satellite transmission beyond the wellsite. Russian manufactuer PskovGeoCable told Oil&Gas Eurasia during Neftegaz that it has contracts with regional Russian producers to replace outdated transmission systems with fiber optics.

GE, which signed a joint cooperation agreement with Rosneft in June 2013 and has pledged to invest $1 billion by 2020 in joint development of the Russian oil and gas industry, is looking also to buy most of the energy specific business units of French-based Alstom Group. The significance for Russia and the GE relationship with Rosneft lies in Alstom’s smart grid technologies which employs a SCADA solution that is equally applicable to improving the efficiency of oil and gas transport.

Given the history of the acquisition by Russian NOCs of private Russian producers with world class technologies in place also suggest that the continued independence of private producers depends to some extent on the ability of the NOCs to develop their own solutions. Joint ventures like Rosneft’s agreement with