Russia is sitting on staggeringly large reserves of oil trapped in Siberian shale formations, but it will need Western technology to tap this bounty, estimated to be worth upwards of $8 trillion. Bloomberg reports:
Without Western expertise and technology, it’s unlikely Russia could sustain its current production levels, much less increase them, David Pursell, an analyst at Tudor Pickering Holt & Co., said in a phone interview. The country has “zero chance” of exploiting deep-water reserves without Western help, he said. […]“We need to bring mainly know-how” to drill unconventional deposits in Russia, Jacques de Boisseson, Total’s head of exploration and production in the country, said in Moscow today.
So how likely is it that we might keep Western fracking and horizontal well drilling technologies from Russia as a form of energy sanctions—a move that would effectively consign Moscow to a slow but steady decline in production from its massive conventional oil and gas fields? Chief executives from nearly every oil major are meeting at the World Petroleum Congress summit in Moscow this week, and most already have significant investments in Russia. Royal Dutch Shell partnered with Gazprom Neft to explore Siberia’s Bazhenov shale formation, drilling its first well this past January. Exxon Mobil is also interested in that formation—which may be the world’s single largest reserve of shale oil—and is developing a $300 million pilot project there with the Russian firm Rosneft. Similarly, Italy’s Total has partnered with Lukoil to explore the Bazhenov. BP is in on the action as well, having “signed a preliminary agreement last month to evaluate shale reserves in the Volgo-Urals region,” according to Bloomberg.The French will sell Russia warships, U.S. technology will help them develop their hydrocarbon reserves, Germany will buy their gas, and the British will bank all their profits. Each Western power may be acting in their own best interests, but in the end, it’s Putin who appears to be holding the best hand.