• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 57 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days The United States produced more crude oil than any nation, at any time.
  • 10 days e-truck insanity
  • 9 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days How Far Have We Really Gotten With Alternative Energy
  • 8 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 9 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 10 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
Against All Odds American Oil Soars Under Biden

Against All Odds American Oil Soars Under Biden

Under most key metrics, the…

IEA Cuts 2024 Oil Demand Growth Forecast

IEA Cuts 2024 Oil Demand Growth Forecast

Global oil demand growth is…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Russian Banks To Finance 200,000 Bpd In New Oil Production Capacity

  • At least two Russian banks are lending some $6 billion to the oil industry to drill new wells that could add 200,000 bpd to the country’s production quickly.
  • It is a tactic the Russian companies likely borrowed from its U.S. competitors: drilling but not completing wells to have new production at the ready when prices call for it.
Russian wealth fund

At least two Russian banks are lending some $6 billion to the oil industry to drill new wells that could add 200,000 bpd to the country’s production quickly, unnamed sources have told Reuters.

It is a tactic the Russian companies likely borrowed from its U.S. competitors: drilling but not completing wells to have new production at the ready when prices call for it, so they can bring it online fast--completing an oil well takes a lot less time than drilling the whole thing from scratch.

Energy Minister Alexander Novak said in late April that oil companies may start drilling but not completing wells for future production in order to keep oilfield service providers in the business. Now, another goal would be to help Russia maintain or expand its market share on short notice if demand rebounds.

Russia’s oil production is down by about 2 million from last year’s average of 11.3 million bpd per its agreement with OPEC+. Most of the wells that Russian companies had to shut to effect the production cuts were mature ones and may not be brought back on stream when—and if—prices recover, Reuters noted in its report.

This means that new production will be necessary but, if possible, without the full investment done upfront. Instead, the investment will be distributed over a longer period and only when necessary to complete the wells so they can start producing.

Novak earlier this month said he hoped oil demand could recover next year to pre-pandemic levels. However, he noted that it could take two to three years for this recovery to materialize.

Oil demand has been recovering across the world as pandemic-forced national lockdowns began to be lifted and borders reopened. However, the situation is still fragile, with little clarity as to whether demand will improve to pre-crisis levels.

By Irina Slav for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News