Russia has seen the number of new oil and gas discoveries drop to a five-year low, according to GlobalData. The leading data and analytics company notes that Russia discovered only six very small fields in H1 2021, which add a mere 36 million barrels - less than four days of the country’s daily oil production.
Anna Belova, Oil & Gas Analyst at GlobalData, comments: “To retain its place as one of the top oil and gas producing nations, Russia needs to ensure a steady pace of discoveries to replace produced reserves. Otherwise, the effects of COVID-19 and reduced investments will be felt by the Russian oil and gas sector well after the pandemic subsides.”
The past year and half have been challenging for many resource-exporting countries, however, Russia has been able to weather the pandemic-induced demand shock to oil and gas markets with relative success.
Belova continues: “The country’s operators benefited from a quickly negotiated agreement with OPEC+ members to reduce oil production, which led to price stabilization; sustained oil price growth as economies recovered; and the country’s strong rebound in global gas demand, which led to record-high gas prices.”
However, exploration for new reserves has taken a significant hit, as evidenced by reduced drilling activity and, consequently, the steep decline of new oil and gas discoveries.
Belova adds: “Over the past decade, Russia has not only grown its oil and gas production to post-Soviet records, it also successfully explored for new oil and gas. News-making discoveries were made over the decade in offshore waters and new frontier basins, supplemented by large numbers of smaller discoveries in more mature areas. However, COVID-19 has caused a steep drop in new exploration and discoveries, when most Russian operators significantly cut capital expenditures into exploration.”
- Comments provided by Anna Belova, Oil & Gas Analyst at GlobalData
- This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts.
4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis, and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, technology, energy, financial and professional services sectors.