Russia Waking Up to Shale Realities
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  • Jacksonian_Libertarian

    I think Russia is wise (not that it isn’t incompetence that is stopping them) to wait until shale oil technology (Fracking) matures and becomes more efficient. Russia still has plenty of undiscovered oil and gas in standard fields which is much cheaper to produce, and therefore more profitable to develop.

    • f1b0nacc1

      Actually no.
      1) Fracking is a fairly mature technology already, though certainly more development is always welcome. The problem for Russia is that the opportunity costs associated with waiting are greater than the potential benefits gained from a more mature technological base.
      2) Russia depends almost entirely upon their oil and gas extraction as the backbone of their economy, and their eroding competitiveness here is potentially devastating
      3) Russia’s existing oil and natural gas reserves are in fairly difficult and unpleasant areas, both geographically and politically. Exploiting what they have will not be easy, nor inexpensive
      4) Russia’s existing infrastructure is rapidly decaying for a variety of reasons, and will be extremely expensive to refurbish. Fracking now would give them an opportunity to rehabilitate this infrastructure while adding new inputs to the mix

      • Claythorne

        1) What opportunity costs? Oil isn’t going anywhere. Oil prices will rise over time as the world moves from easiest shale fields to those more difficult. Besides, Russians are using fracking a lot to prolong the lifetime of traditional oil fields of Ob and Pechora, for example. They can count their money and implying otherwise is plain wrong.
        2) Russia does not depend almost entirely upon their oil and gas extraction. Export/import trade balance – yes, depends a lot. Massive budget spendings on arms and projects like Sochi Olympics – yes. But if we speak of GDP, fossil fuels barely make 15% of that.
        3) Same goes for their shale fields. Even the mentioned Bazhenov field is located deep in Siberia. And there are many others further in there.
        4) Not quite true. Infrastructure renovation and extension is one of their main goals nowadays and “decay” is reversed.
        Overall, your opinion on Russia seems to be based on what Russia was like 10 years ago. But it has changed a lot.

        • f1b0nacc1

          1) Opportunity costs are different than expected ROI. Not exploiting their gas reserves now (when they still have a semi-captive market in Western Europe, when they can get good prices absent serious competition on the world markets from the US, etc.) is not the same as as later, when prices are lower due to increased competition. Oil is a bit different, but overall the same sort of dynamic applies.
          2) I take your point regarding trade/export vs GDP as a whole, but I think you underestimate the ‘knock-on’ effect of Russia’s fossil fuel industry. Their economy is a pathetic mess (better than it was, but still awful for a country with such vast natural gifts), and if you remove the income from gas/oil, Russia is little more than a third world country with nukes.
          3) Once again, I am not sure that we seriously disagree here. Yes, their potential fracking sites are not in the most hospitable areas, but given that their existing ones are no better, diversifying their options strikes me as a prudent move at the very least.
          4) When I was last in Russia (far more recently than 10 years ago), my impression was that if anything, things had gotten worse. They are bouyed by a resource bubble, but the deepr problems of corruption, creeping authoritarinism, overall decay of just about everything that is not owned by Putin cronies (and most of that too), and a general sense of supine surrender on the part of the population are simply no better. The demographic mess has improved slightly, but even there the long-term health issues have no receded.

  • Pedro Zozaya

    Why Russia to extract shale oil? For example, a company such as “Rosneft” may be another 100 years to produce normal oil. Why spend big money on shale oil? It is not profitable.

  • profaner vulgar

    When You shale gas comes to an end … We are only begin … Why run ahead of the locomotive?

  • profaner vulgar

    Shale feast is long gone. It was not. There are subsidizing their own economy through the sale of U.S. shale mix – unprofitable for production, but at lower prices.

  • profaner vulgar

    work on propane freking and other shales in the Soviet Union carried out and drilled back in the 50-60 years of the last century

  • profaner vulgar

    Dutch- British oil company Royal Dutch Shell announced the sale of its assets by shale deposits in Texas, Kansas and Colorado. As the newspaper writes Wall Street Journal, Shell plans to sell its land area of ​​106 thousand acres in the Eagle Ford field (Eagle Ford). This is one of the largest operating oil shale deposits in the United States .

    The company said that the 192 wells drilled in the area , ” can not go on the planned volumes of mining .” Shell also wants to find buyers in the area of ​​600 thousand acres in the Mississippi Lime geologic formation in the state of Kansas. In addition, the group wants to get out of the shale project in Colorado, ” which is at an early stage.”

  • profaner vulgar

    And why should this dead-Russia unprofitable, obsolete technology, if more expensive copy-mining of hydrocarbons??

  • profaner vulgar

    Exxon Mobil, drilled two exploration wells in shale gas in Poland, declined last year from plans to extract shale here. The company simply did not find commercial reserves of shale gas, recognizing the project unprofitable.

  • profaner vulgar

    About these shales knew even 60 years ago. Just the technology of their production , especially in Europe ( dotted underground springs ) barbarous towards the environment. Cost of production is much higher , even compared with Yamal while lower calorific gas . In the U.S., it rolls , as territory more and more liberal legislation , and the prey were small companies with a similar point of sale. Batts is a myth artificially inflated in order to influence the formation of hydrocarbon prices . With the Energy Charter did not happen, and that’s launched in the media ” slates ” . It’s like the war in Vietnam . Lost the war , but to sweeten the bitter pill for the PEOPLE made ​​a movie Rambo II, Type is not all bad , there are still heroes .

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