From Past to Present: How Hydrocarbon Production Methods Change in Russia


Hydrocarbon Production
Russia’s offshore Prirazlomnaya oil platform sits in the Pechora Sea in the Arctic region. Photographer: Sergey Anisimov/Anadolu Agency/Getty Images

The development of oil and gas fields in the Arctic is difficult due to complex mining, geological and climatic conditions. Russia was one of the first countries to search for oil and gas deposits in the Arctic. In 1930, the first oil reservoir – Chibyu - was discovered in the Komi Republic. At that time, other Arctic countries had not been pushed for oil and gas exploration and extraction in the region yet.

Times change, the challenges remain consistent. Nowadays, 156 subsoil user companies with a total of 750 subsoil licenses are in charge for oil and gas field development in the Arctic Zone of the Russian Federation. Oil and gas production is costly for these companies compared to other oil and gas-bearing areas, which demands the development of new methods and technologies to keep costs down.

According to some estimates, about $3-7 million is spent to drill one production well. However, actual costs of drilling oil well are four times higher, from $10 million to $28 million. These huge sums are spent on drilling wells which do not contain hydrocarbons. Only a quarter of the total number of wells in Russia and continental Europe are operating, and about a fifth of them are running well in the US. What is the way out?

One could suggest to nip it in the bud. For example, the EU 2021 Arctic Policy seeks a ban on tapping new oil, coal and gas deposits in the Arctic under the environmental pretext.

Another solution may be the development and application of sustainable methods in the oil and gas sector. Traditional methods include geological, geophysical and geochemical methods culminating in drilling operations. A new method of predicting and exploration of hydrocarbon deposits on the Arctic shelf, the so-called Isotope Geochemistry Method, was established by scientists of the V.G. Khlopin Radium Institute.

This method allows to identify the most promising areas for pre-exploration and further exploration drilling of oil and gas wells. Thus, the probability of the exploration drilling process leading to an exploration dry hole, a well that does not contain commercial quantities of hydrocarbons, is reduced twice. This method will allegedly reduce seismic exploration costs.

Furthermore, researchers at Siberian Federal University have recently proposed using nanofibers to improve the quality of solutions used in drilling oil and gas wells in permafrost. The supplement will reduce equipment runout and fluid losses, as well as reduce the environmental impact by eliminating standard toxic chemicals from drilling fluid.

Ongoing changes in the methods of finding and extracting hydrocarbon reserves at an acceptable cost to companies is a priority for the Russian Government.

In December 2023, a new Licensing Program for Hydrocarbon Subsoil Areas in the Arctic Zone of the Russian Federation was adopted for the period until 2035, the resource base of which can potentially load the Northern Sea Route. It is expected that oil production in the Russian Arctic could rise by 5 million tonnes per year, while gas and LNG production - by 15 million tonnes per year.


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