• 4 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 7 minutes Countries with the most oil and where they're selling it
  • 10 minutes Stack gas analyzers
  • 13 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 22 mins US Military Spends at least $81 Billion Protecting OPEC Persian Gulf Oil Shipping Lanes (16% DoD Budget)
  • 7 hours How many drilling sites are left in the Permian?
  • 9 hours "Undeniable" Shale Slowdown?
  • 7 hours China To Promote Using Wind Energy To Power Heating
  • 4 hours Gas Flaring
  • 2 hours Mueller Report Brings Into Focus Trump's Attempts to Interfere in the Special Counsel Investigation
  • 6 hours Climate Change Protests
  • 2 hours Overheating the Earth: High Temperatures Shortened Alaska’s Winter Weather
  • 1 day Oil at $40
  • 22 hours Japan’s Deflation Mindset Could Be Contagious
  • 1 day Negative Gas Prices in the Permian
  • 6 hours Tax Credits for Energy Storage
  • 6 hours Everything Is Possible: Germany’s Coal Plants May Be Converted to Giant Batteries
  • 19 hours U.S. Refiners Planning Major Plant Overhauls In Second Quarter

Breaking News:

Guaido Takes Strides To Topple Maduro

Exxon Signs Deal to Help Rosneft Develop Huge Bazhenov Shale Play in Siberia

Vladimir Putin’s power in Russia is underpinned by oil boom that he has overseen. Unluckily for him the oil boom has passed and reserves are declining, threatening the production capacity so important for the revenue his government earns, and for maintaining his grip over the nation.

Russia’s Bazhenov shale play in Siberia is one of the largest in the world, 80 times larger than the Bakken shale play in North Dakota. It offers the potential for securing Putin’s power and returning Russia to the top as the world’s largest oil and natural gas producer.

However the Siberian climate in which the Bazhenov exists makes fracking much more difficult. This has lead Russia’s state controlled oil company, OAO Rosneft, to form a partnership with Exxon Mobil Corp who have vast experience fracking for tight oil in the US. As part of the deal Rosneft has also acquired 30% of a Texas tight oil project in order to receive direct experience with fracking technology.

Hopes that the Bazhenov will one day match the growth of North Dakota’s Bakken field depend on Putin offering tax breaks in order to make the projects profitable. Putin may be reluctant to offer the tax breaks as it will see the nation’s income from petroleum revenue fall.

As Ronald Paul Smith, an oil and gas analyst from Citigroup Inc., said, “if the government is serious about promoting tight oil production, it is within their grasp.”

Rex Tillerson, the CEO of Exxon, is excited by the potential of the Bazhenov play, but admits that the tax breaks will be vital. “The in-place potential is enormous -- billions of barrels. The real issue is can we develop it in a cost effective way? -- same as the issue we have with tight oil and unconventional resources in North America.”

Other companies are also working on the Bazhenov field, including Russia’s second largest oil producer OAO Lukoil, and OAO Surgutneftegas, both of who already have the resources to access the billions of barrels in the formation.

By. Charles Kennedy of Oikprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News