The total value of Russia's oil reserves is estimated at $1.2 trillion, nearly doubling the valuation over the course of a single year, Moscow's Ministry of Natural Resources and Environment reported Friday.
According to the ministry’s data, the market value of the oil reserves increased by 88 percent over the past year, largely due to newly discovered reserves as well as the higher valuations for the existing reserve supply. Russia's oil reserves valuation increased by $385 billion to $1.07 trillion.
Regarding newly discovered oil reserves in volume terms, the increase was not so impressive. An increase of 8.7 percent was recorded, from 9.04 billion to 9.83 billion tons, according to RBC. It caused a 73% year-on-year surge in monetary value. The value of oil reserves reached some 71.7 percent of Russia’s GDP in 2018.
Oil accounted for 72 percent of Russia's gross domestic product last year. The oil production cost remains about $15.5 per barrel, in line with previous estimates of $8-20 per barrel.
The value of gas reserves increased by about a quarter, from $177 billion to $221 billion. In volume terms, it increased by 3.6 percent, to 15 trillion cubic meters. The value of Russia’s iron ore was estimated at $18 billion, gold was valued at $9.6 billion, and diamonds were estimated to be worth $8.5 billion. Copper and coal reserves in value terms have slightly decreased since 2017.
The ministry used its own methodology where an assessment did not account for all reserves, but only those which are commercially retractable. However, these estimates were criticised by the experts surveyed by RBC. Their criticism was related to the pricing methodology for its treatment of tax as it based its calculations on the sales price and not the netback.
By Charles Kennedy for Oilprice.com
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