"We meant to do better, but it came out as always"
-Viktor Chernomyrdin, former head of Gazprom
From the Financial Post:
Fracking isn’t just for shale. In Russia, producers are importing techniques from the U.S. to squeeze billions of dollars of extra oil from Soviet-era fields.
TNK-BP, Russia’s third-largest producer, will use hydraulic fracturing combined with horizontal drilling in almost half the wells it sinks this year, a sixfold increase in just two years, the company said. OAO Rosneft, OAO Lukoil and OAO Gazprom Neft have similar plans.
Meanwhile, Saudi Arabia, the world’s biggest oil exporter, will drill about seven test wells for shale gas this year, according to Oil Minister Ali Al-Naimi.
“We know where the areas are,” Al-Naimi said at a conference in Hong Kong Monday, referring to the country’s shale gas deposits. “We have rough estimates of over 600 trillion cubic feet of unconventional and shale gas so the potential is very huge and we plan to exploit it.”
Saudi Arabia is seeking to develop its natural gas resources to meet rising domestic energy demand. Saudi Arabian Oil Co., or Saudi Aramco, is searching for shale gas in the northwest of the country as it explores for unconventional resources such as sour gas in the oil-rich eastern region and in the Empty Quarter deserts, Senior Vice President of Upstream Amin Nasser told a conference March 10 in Manama.
The nation may hold as much as 645 trillion cubic feet of technically recoverable shale gas, the world’s fifth-largest deposits, behind China, the U.S., Argentina and Mexico, according to estimates by Baker Hughes Inc. The kingdom also has about 282.6 trillion cubic feet of proven conventional gas reserves, according to Aramco’s 2011 annual report.
Russian Winter
So-called fracking, the process of blasting oil from rock by injecting a mixture of water, sand and chemicals into wells, has been used for years in Russia’s Siberian oil heartland to stimulate production. What’s new is allying it with horizontal drilling, turning the drill-bit 90 degrees to bore horizontally to reach more oil-bearing rock. The pairing was perfected in the U.S. to get economically viable flows out of shale deposits. Used in Russia, producers are recovering 15 percent more crude from aging deposits.
“This is a very big change in the way the company approaches production that has literally happened in the last year and a half,” said Gazprom Neft’s deputy chief executive officer. “We have made breakthroughs.”
Enhancing production from decades-old fields is needed to maintain Russia’s crude production above 10 million barrels a day for a fourth year, a figure that surpasses Saudi Arabia and the U.S., said Cliff Kupchan, an analyst at Eurasia Group. Apart from the Russian state, which gets half its revenue from oil and gas, the other winners are suppliers of people and equipment to frack wells including Schlumberger Ltd., Weatherford International Ltd. and C.A.T. Oil AG....MORESome more Viktorisms:
On his background on energy minister: "I have grown up in the atmosphere of oil and gas."
On dealing with the frequently uncooperative Duma: "Government is not the organ in which one uses his tongue only."
On Russia's unstable party system: "Whatever party we establish, it always turns out to be the Soviet Communist Party."
On the future: "We will live so well that our children and grandchildren will envy us!"
On his family: "I have approximately two sons."
On political efficiency: "We accomplished all items: from A to B."
