Russia's Oil Extraction Level To Stay Unchanged In 7-10 Years, May Decrease Later - ROSGEO

Russia may continue to extract the same quantities of oil in the medium term of 7-10 years, but in a decade this volume might begin to decline in the absence of needed financing, Russian ROSGEO state company CEO Roman Panov said on Friday

MOSCOW (UrduPoint News / Sputnik - 18th January, 2019) Russia may continue to extract the same quantities of oil in the medium term of 7-10 years, but in a decade this volume might begin to decline in the absence of needed financing, Russian ROSGEO state company CEO Roman Panov said on Friday.

According to Panov, without government increasing public financing of geological prospecting from the current 30 billion rubles ($452 million) per year to 60-80 billion Russia will not be able to maintain the current level of oil extraction beyond 10 years.

"In my opinion, in the medium term, if we speak about the horizon of 7-10 years, I do not see any objective risks for the current production volume to decrease ... [Without the needed funding] there are high risks that beyond the horizon of 7-10 years a sharp decrease [in oil extraction] might occur," Panov stated.

Panov added that only about 25 percent of oil extracted over the past 15 years was coming from new oil fields, while the rest was extracted from the already existing ones.

According to Panov, in order to maintain the current volume of oil extraction in the long-run, it is crucial to search for new oil fields and develop hard-to-extract oil reserves and fields in the Arctic.

"And, perhaps, if the state can stimulate small and medium-sized companies, the work [should be carried out] at small and medium-scale deposits ... According to our estimates, up to 100 million tonnes [of oil] can be extracted from the small fields. This is the task that small-sized companies can solve," Panov said.

In 2018, Russian oil production increased by 1.6 percent year-on-year and amounted to 556 million tonnes.