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Line 1: − + − In 2023, OilPrice.com reported in an article entitled ''Analysts Predict 42% Decline In Russian Oil Production By 2035'': − {{Cquote|But Moscow cannot continue defying the odds indefinitely. BP Plc (NYSE: BP) has predicted that the country’s output is likely to take a big hit over the long-term, with production declining 25%-42% by 2035. BP says that Russia's oil output could decrease from 12 million barrels per day in 2019 to 7-9 million bpd in 2035 thanks to the curtailment of new promising projects, limited access to foreign technologies as well as a high rate of reduction in existing operating assets. − − In contrast, BP says that OPEC will become even more dominant as the years roll on, with the cartel’s share in global production increasing to 45%-65% by 2050 from just over 30% currently. Bad news for the bulls: BP remains bearish about the long-term prospects for oil, saying demand for oil is likely to plateau over the next 10 years and then decline to 70-80 million bpd by 2050. − − That said, Russia might still be able to avoid a sharp decline in production because many of the assets of oil companies that exited the country were abandoned or sold to local management teams who retained critical expertise.<ref>[https://oilprice.com/Energy/Crude-Oil/Analysts-Predict-42-Decline-In-Russian-Oil-Production-By-2035.html ''Analysts Predict 42% Decline In Russian Oil Production By 2035''], OilPrice.com</ref>}} − − Stratfor, an American strategic intelligence publishing company, reported in their 2020 article ''The Golden Age of Russian Oil Nears an End'': − {{Cquote| − *In the next 10-20 years, Russian oil will become more expensive as extraction from less accessible basins becomes necessary to maintain current export levels. − − *Internal inefficiencies within Russia's oil sector, as well as the remote locations of remaining reserves and potential shifts in future oil demand, add up to a murky future for the country's energy-reliant economy. − − *Moscow may adjust its budget to ensure plummeting oil prices don't cut into its government spending, but proper economic diversification away from energy remains a complex and unlikely process.<ref>[https://archive.ph/RzRRI The Golden Age of Russian Oil Nears an End], Stratfor, 2020</ref>}} − − In 2019, the ''Moscow Times'' reported: − {{Cquote|Russia is one of the most expensive places in the world to produce oil, new analysis produced for Saudi Arabia’s state-owned oil giant Saudi Aramco has found. − − The cost of producing a single barrel of Brent crude oil came in at around $42 for Russian onshore projects, and $44 for offshore projects, IHS Markit estimated. That was more than twice the $17 per barrel production costs in Saudi Arabia — the cheapest in the world. − − Brent crude is currently trading at $62.40 a barrel on the world markets. − − The analysis, conducted by IHS Markit and published alongside Saudi Aramco’s initial public offering (IPO) prospectus, found offshore projects in Venezuela had the highest break-even price in the world at $63 a barrel, followed by China at $55-60.<ref>[https://www.themoscowtimes.com/2019/11/12/russian-oil-production-most-expensive-world-saudi-aramco-ipo-a68132 Russian Oil Production Among Most Expensive in World], Moscow Times, 2019</ref>}} − − == What additional factors could disrupt Russia's oil production between 2025 and 2050? == − − According to the website Discovery Alert: − {{Cquote|Technological limitations due to sanctions represent the most significant challenge, particularly for complex reservoirs requiring Western fracking, horizontal drilling, or enhanced recovery techniques. As Rystad Energy's Daria Melnik observes, "Technological sovereignty in fracking remains Russia's Achilles' heel." − − Additional disruption risks include accelerated global energy transition, domestic policy shifts following leadership changes, geopolitical developments affecting export markets, and investment constraints in production infrastructure. The average water cut in West Siberian fields has reached 82%, requiring approximately $2 billion annually in treatment costs—a technical challenge that will intensify without access to advanced separation technologies... − − With 2.3 million workers employed in the oil and gas sector—approximately 15% nearing retirement age—workforce challenges compound technological constraints. Refinery utilization rates have declined to 78% following EU product import bans, creating downstream bottlenecks that could eventually affect upstream production decisions. − − The strategy must account for limitations on access to Western technology, particularly for enhanced oil recovery and complex reservoir development. This reality implies increased focus on developing domestic capabilities or forming alternative partnerships with non-Western technology providers. − − Digitalization lags behind global standards, with 40% of upstream operations using IoT sensors compared to 65% globally.<ref>[Russia’s Cautious Energy Strategy: Stabilising Crude Output Through 2050], Discover Alert, 2025</ref>}} − − == 2024: Russian crude oil production for the past 5 years == − − [[File:Historical Russian Oil production chart October 2024.jpg|thumbnail|center|1000px|October 2024: Russian crude oil production for the past 5 years<ref>[https://ycharts.com/indicators/russia_crude_oil_production#:~:text=Russia%20Crude%20Oil%20Production%20is,2.14%25%20from%20one%20year%20ago. October 2024: Russian crude oil production for the past 5 years]</ref>]] − − == Russia crude oil extraction cost March 2005 to December 2018 == − − For more information, please read: [https://archive.ph/RzRRI The Golden Age of Russian Oil Nears an End], Stratfor, 2023 − − "Russia's easily accessible oil reserves have long been the cornerstone of its economy. But these conventional fields are depleting, leading to the need to invest and expand into more untapped sources. This transformation will not be easy or cheap, as various factors have led to a poorly optimized oil sector that's ill-equipped to soften the blow of rising costs... Russia may have little choice but to accept that its glory days of oil dominance and high profit margins are nearing an end." - [https://archive.ph/RzRRI The Golden Age of Russian Oil Nears an End], Stratfor, 2023 − <br /> − <br /> − [[File:Russia crude oil extraction cost Mar 2005 to Dec 2018.png|thumbnail|1200px|center|Russia crude oil extraction cost March 2005 to December 2018<ref>[https://www.ceicdata.com/en/russia/energy-production-prime-costs/prime-costs-crude-oil-extraction Russia Prime Costs: Crude Oil Extraction]</ref> − <br /> − <br /> − Russia's crude oil extraction cost affects how much profit Russia can earn from Russian oil sales. In addition, it can affect the potential amount of Russian oil drilling because if oil is too costly to extract in a given area, the drilling will not occur. − <br /> − <br /> − Russia's oil extraction cost are expected to rise in the future. See: [https://archive.ph/RzRRI The Golden Age of Russian Oil Nears an End], Stratfor, 2023 ]] − {{Clear}} − − == Other resources on future Russian oil production == − − *[https://oilprice.com/Energy/Crude-Oil/Analysts-Predict-42-Decline-In-Russian-Oil-Production-By-2035.html Analysts Predict 42% Decline In Russian Oil Production By 2035], OilPrice.com, 2023 − − *[https://archive.ph/RzRRI The Golden Age of Russian Oil Nears an End], Stratfor, 2023 − − *[https://interfax.com/newsroom/top-stories/87420/ BP forecasts decline in Russia's oil output up to 2035 because of sanctions restrictions on access to technology, investments], Interfax, January 2023 − − *[https://ogst.ifpenergiesnouvelles.fr/articles/ogst/full_html/2019/01/ogst190118/ogst190118.html A long-term outlook on Russian oil industry facing internal and external challenges], 2019 journal abstract − − *[https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/09/The-Future-of-Russian-Oil-Production-in-the-Short-Medium-and-Long-Term-Insight-57.pdf The Future of Russian Oil Production in the Short, Medium, and Long Term], Oxford Institute of Energy Studies, 2019 ([https://www.oxfordenergy.org/publications/the-future-of-russian-oil-production-in-the-short-medium-and-long-term/ Abstract for the article]) − − '''Videos:''' − − *[https://www.youtube.com/watch?v=M0LzuMUOO0k How Stable Is the Russian Oil Industry?] - 2023 Video − − *[https://www.youtube.com/watch?v=5Gcl1dO2_0s Russian Oil's Vanishing Act] - 2023 video − − *[https://www.youtube.com/watch?v=CQRcvquXJ2Q Crumbling Infrastructure in the Russian Taiga] - 2023 video − − === Russia, the Arctic region and fossil fuels === − − Video: − − *[https://www.youtube.com/watch?v=EZOWbWuMKDI How Russia is taking control of the Arctic | It's Complicated], ''The Guardian'', 2024 − − == 2023: In Russia, the shortage of personnel in the oil and gas industry was assessed == − [[File:Putin I'm not bluffing.PNG|thumbnail|250px|right|Russian [[demography]] has long been an existential issue to [[Essay: Vladimir Putin is a corrupt kleptocrat and an authoritarian|Vladimir Putin]]. In 2021, he declared “saving the people of Russia is our top national priority".<ref>[https://fortune.com/2022/10/18/russia-population-historic-decline-emigration-war-plunging-birth-rate-form-perfect-storm/ Russia’s population is in a historic decline as emigration, war and a plunging birth rate form a ‘perfect storm’], Fortune magazine, 2022</ref> − <br /> − <br /> − See: [[Essay: Russia is dying out. The war in Ukraine is making Russia's demographic crisis even worse|Russia is dying out. The war in Ukraine is making Russia's demographic crisis even worse]] ]] − ''See also:'' [[Essay: Low labor productivity is one of the most acute and important problems facing Russia|Low labor productivity is one of the most acute and important problems facing Russia]] and [[Essay: Russia is dying out. The war in Ukraine is making Russia's demographic crisis even worse|Russia is dying out. The war in Ukraine is making Russia's demographic crisis even worse]] − − The Oreanda-News agency was founded in August 1994 in Moscow, becoming one of the first independent news agencies in contemporary Russia.<ref>[https://www.oreanda-news.com/en/about/ Oreanda-News agency - About page]</ref> Since 2007, it has been based in [[Saint Petersburg]], Russia.<ref>[https://www.oreanda-news.com/en/about/ Oreanda-News agency - About page]</ref> − − In 2023, Oreana-News reported in an article entitled ''In Russia, the shortage of personnel in the oil and gas industry was assessed'': − {{Cquote|Currently, the Russian oil and gas industry lacks 25 thousand employees. Elena Kuznetsova, partner of Yakov and Partners, told RIA Novosti about the shortage of staff. − − She noted that the need for personnel in the sphere is 90 percent higher than at the beginning of 2021. Companies are particularly in need of welders, locksmiths, machinists, engineers and drillers. Moreover, problems with the lack of workers are fixed not only in the energy sector. In particular, companies are actively looking for sales specialists, IT specialists, builders and managers. − − Kuznetsova emphasizes that it is most difficult for employers to find medium- and highly qualified personnel, since they cannot be replaced quickly. Experts attribute the shortage of labor to the relocation of specialists, the low attractiveness of work in remote regions, as well as the aging of existing personnel and low motivation of young people. − − Earlier, the head of the Central Bank, Elvira Nabiullina, said that the shortage of personnel is the main problem of the Russian economy. According to the representative of the Bank of Russia, for further economic growth, it is necessary to ensure not the availability of money and loans, but to increase labor productivity.<ref>[https://www.oreanda-news.com/en/tek/in-russia-the-shortage-of-personnel-in-the-oil-and-gas-industry-was-assessed/article1494706/ ''In Russia, the shortage of personnel in the oil and gas industry was assessed''], Oreana News, 2023</ref>}} − − During his annual phone-in with the public in June this year, President [[Essay: Vladimir Putin is a corrupt kleptocrat and an authoritarian|Vladimir Putin]] described low productivity as “one of the most acute and important” problems facing Russia.<ref>[https://www.themoscowtimes.com/2019/09/23/why-is-russia-so-unproductive-a67397 Why Is Russia So Unproductive?], Moscow Times, 2019</ref> See: [[Essay: Low labor productivity is one of the most acute and important problems facing Russia|Low labor productivity is one of the most acute and important problems facing Russia]] − − For more information, please see: − − *[[Essay: Russia is dying out. The war in Ukraine is making Russia's demographic crisis even worse|Russia is dying out. The war in Ukraine is making Russia's demographic crisis even worse]] − − == Russia's economy and gas and oil profits will be BADLY damaged when China's economy declines == − − See: [[Essay: Russia's economy and gas and oil profits will be BADLY damaged when China's economy declines|Russia's economy and gas and oil profits will be BADLY damaged when China's economy declines]] − − == Countries with diversified economies are more resilient and stable == − [[File:Eggs in a basket.jpg|right|thumbnail|350px|"Don't put all your [[egg]]s in one basket" - Popular saying.]] − ''See also:'' [[Diversification]] − − Booz & Company was a global strategy consulting team established in the United States in 1914. The firm was acquired by PwC on April 4, 2014. − − Below is the executive summary of their report entitled ''Resilient, stable, sustainable: The benefits of economic diversification'' − {{Cquote|The effects of the recent global economic crisis were allpervasive, and demonstrated that no economy is safe from destabilizing external events. Resource-dependent countries, with their narrow base of economic activity, are particularly vulnerable, but all countries may have vulnerabilities stemming from a lack of diversification in one or more economic dimensions, and they must be more vigilant in managing risks to their economies. Not only must a country’s gross domestic product (GDP) be balanced among sectors, but key elements of its economy must be varied, flexible, and readily applicable to a variety of economic opportunities, and areas of overconcentration must continually be identified and mitigated. Policymakers should work to achieve greater economic diversification, in order to reduce the impact of external events and foster more robust, resilient growth over the long term. − − For resource-rich, developing economies, the immediate imperative is to diversify export-oriented sectors, but for the benefit of long-term sustainability, they must also look at the larger picture. A strong institutional and regulatory framework and workforce development initiatives are indispensable to the diversification effort; and proper management of human capital is key, especially in those countries experiencing a “demographic dividend.” Implementing such comprehensive diversification and risk management strategies won’t be easy, but the result—a − diverse, stable, and growing economy—is worth the effort.<ref>[https://www.strategyand.pwc.com/m1/en/reports/strategyand-resilient-stable-sustainable-benefits-economic-diversification.pdf ''Resilient, stable, sustainable: The benefits of economic diversification''], Booz & Company, 2011</ref>}} − − '''Related articles:''' − − *[https://www.amarilloedc.com/blog/the-importance-of-a-diversified-economy#:~:text=A%20diversified%20economy%20creates%20a,the%20growth%20of%20supporting%20industries. The Importance Of A Diversified Economy] − − *[https://www.strategyand.pwc.com/m1/en/reports/strategyand-resilient-stable-sustainable-benefits-economic-diversification.pdf ''Resilient, stable, sustainable: The benefits of economic diversification''] − − == Why Russia needs to diversify its economy so it's not overly dependent on oil and gas for its overall economy == − − *[https://archive.ph/0nP8w Russia’s reliance on energy spells trouble for its economy], The Economist, February 2024 − − *[https://www.bbc.com/future/article/20211115-climate-change-can-russia-leave-fossil-fuels-behind Will Russia ever leave fossil fuels behind?], BBC, 2021 − − *[https://warsawinstitute.org/russias-economy-becoming-heavily-dependent-hydrocarbons/ Russia’s Economy Is Becoming Heavily Dependent on Hydrocarbons], Warsaw Institute, 2020 − − *[https://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdf Diversifying Russia], European Bank − − *[https://www.cnbc.com/2016/06/17/russia-too-dependent-on-oil-and-its-hitting-the-ruble-says-ex-russian-fin-min.html Russia too dependent on oil—and it’s hitting the ruble, says ex-Russian], 2016 − <br /> − <br /> − [[File:Oil-barrel-black-hi.png|225px|thumbnail|center|The Russian economy is too dependent on oil/gas.<ref>*[https://archive.ph/0nP8w Russia’s reliance on energy spells trouble for its economy], The Economist, February 2024 − − *[https://www.bbc.com/future/article/20211115-climate-change-can-russia-leave-fossil-fuels-behind Will Russia ever leave fossil fuels behind?], BBC, 2021 − − *[https://warsawinstitute.org/russias-economy-becoming-heavily-dependent-hydrocarbons/ Russia’s Economy Is Becoming Heavily Dependent on Hydrocarbons], Warsaw Institute, 2020 − − *[https://www.ebrd.com/downloads/research/economics/publications/specials/diversifying-russia.pdf Diversifying Russia], European Bank − − *[https://www.cnbc.com/2016/06/17/russia-too-dependent-on-oil-and-its-hitting-the-ruble-says-ex-russian-fin-min.html Russia too dependent on oil—and it’s hitting the ruble, says ex-Russian], 2016</ref> − <br /> − <br /> − Countries and economies that are more diversified in revenue sources are more resilient, stable and sustainable.<ref>[https://www.strategyand.pwc.com/m1/en/reports/strategyand-resilient-stable-sustainable-benefits-economic-diversification.pdf ''Resilient, stable, sustainable: The benefits of economic diversification''], Booz & Company, 2011</ref><ref>[https://www.amarilloedc.com/blog/the-importance-of-a-diversified-economy#:~:text=A%20diversified%20economy%20creates%20a,the%20growth%20of%20supporting%20industries. The Importance Of A Diversified Economy]</ref><ref>[https://www.strategyand.pwc.com/m1/en/reports/strategyand-resilient-stable-sustainable-benefits-economic-diversification.pdf ''Resilient, stable, sustainable: The benefits of economic diversification'']</ref>]] − − == The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come == − − See also: [[Essay: The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come|The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come]] − <br /> − <br /> − [[File:The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come.jpg|thumbnail|center|1200px|In August of 2023, the USA was outproducing Russia and Saudi Arabia in oil production.<ref>[https://realinvestmentadvice.com/us-oil-production-hits-records/ ''US Oil Production Hits Records'']</ref>. The best is yet to come!<ref>[https://www.foxnews.com/video/6342454631112 Donald Trump promises to drill for oil, close southern border on first day as president]</ref><ref>[https://oilprice.com/Latest-Energy-News/World-News/The-Oil-And-Gas-Workers-Association-Endorses-Trump-For-2024-Vote.html The Oil And Gas Workers’ Association Endorses Trump For 2024 Vote]</ref> − <br /> − <br /> − The U.S. Energy Information System reported in 2023: "Strong continuing international demand for petroleum and other liquids will sustain U.S. production above 2022 levels through 2050, according to most of the cases we examined in our Annual Energy Outlook 2023 (AEO2023). We project that the United States will continue to be an integral part of global oil markets and a significant source of supply in these cases, as increased exports of finished products support U.S. production."<ref>[https://www.eia.gov/todayinenergy/detail.php?id=56041 U.S. production of petroleum and other liquids to be driven by international demand]</ref> − <br /> − <br /> − For more information, please see: [[Essay: The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come|The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come]] ]] − {{Clear}} − == 2024: K.T. McFarland, Deputy National Security Advisor under the Trump Administration: Donald Trump DOESN'T want to abandon Ukraine 'he wants to BANKRUPT Russia' by ramping up oil and gas production == − − K.T. McFarland served as Deputy National Security Advisor under Michael Flynn in 2017 during the Donald Trump administration. − − 2024 video: [https://www.youtube.com/watch?v=RS-r503N4JY&t=232s K.T. McFarland, Deputy National Security Advisor under the Trump Administration: Donald Trump DOESN'T want to abandon Ukraine 'he wants to BANKRUPT Russia' by ramping up oil and gas production] − − == See also == − − *[[Essay: Why I am not bullish on Russia's future|Why I am not bullish on Russia's future]] − *[[Essay: The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come|The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come]] − − == External links == − − *[https://russiapost.info/economy/opec OPEC’s Waning Influence and the Weak Outlook for Russian Oil], Russian Post, 2024 − *[https://ycharts.com/indicators/russia_crude_oil_production#:~:text=Basic%20Info-,Russia%20Crude%20Oil%20Production%20is%20at%20a%20current%20level%20of,4.36%25%20from%20one%20year%20ago. Russia Crude Oil Production], Y Charts − − ==References== − <references /> − − [[Category: Essays]] − [[Category: Russia]] − [[Category:Geology]]
Essay: Russian oil: Lower future production/profits due to future higher extraction costs and other inefficiencies (view source)
Revision as of 21:53, October 25, 2025
, 21:53, October 25, 2025Reverted edits by Conservative (talk) to last revision by RobSmith
[[File:Flag of Russia.png|right|thumbnail|400px|Flag of Russia]]
[[File:Stupid people.PNG|center|650px|thumb|Message from Trump]]