Russia has the eighth largest oil reserves in the world, and according to the US EIA, is the third largest producer of oil after the US and Saudi Arabia. It is also the third largest energy user.
Most estimates of proven oil reserves in Russia tend to concentrate on those in western Siberia and the Urals-Volga regions, which currently supply about two-thirds of Russia's oil. However, there are other potentially huge reserves elsewhere including East Siberia, Russia's Far East, and the Russian Arctic - much of which is still unexplored.
Russia's own estimate of its current oil reserves stands at 29 billion tons which, based on existing consumption rates, would be depleted some time in the 2040's. But Russia also has other oil reserves that are currently more expensive, more geologically complex and more distant from its traditional regions of production, which are still to be explored and developed as and when technology develops and recovery costs fall.
For example, Russia's vast shale/tight oil reserves are on a scale similar to those of the US and include the gigantic tight-oil formation, the Bazhenov Suite, which is the largest shale deposit in the world and covers a territory of more than 1 mill km2 and contains an estimated minimum of 20 bill tons of oil. However, Russia’s tight oil currently needs at least an oil price level of 55-60 USD per barrel to break even, compared with a conventional oil breakeven level in the 20-30 USD per barrel range. Once Russia's tight oil technology develops and recovery costs fall then these shale deposits will become a significant resource.
In addition to these other regions and sources, enhanced oil recovery techniques and supplementary exploration are revealing new opportunities within Russia’s conventional oil reserves. For example, the discovery of the Velikoye field in the Astrakhan Oblast with its estimated additional reserves of 330 mill tons.
Currently Russia produces over 10,000 million barrels of oil per day, representing about 12% of the world's oil and has a similar share of global oil exports. Oil production fell sharply after the collapse of the Soviet Union to around 6 mill barrels per day and is only now returning to its previous levels achieved during the Soviet Union era.
Over 70 percent of Russian oil production is exported, mainly to European countries. The remaining 30 percent is refined locally. Russia's economy is therefore clearly highly dependent on its income from oil and natural gas products. Its technological development and advance in recovery techniques has therefore been seriously hampered by both the drop in oil prices in recent years as well as by the various sanctions currently in force.
The biggest Russian oil company is Rosneft followed by Lukoil. All oil trunk pipelines (except Caspian Pipeline Consortium) are owned and operated by the state-owned monopoly Transneft.
Prirazlomonya platform. (Photo: Gazprom Neft)