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The value of Russia's crude oil reserves dropped by 17 percent, or by US$164 billion (12.7 trillion Russian rubles), in 2019 compared to 2018, Russia's Ministry of Natural Resources and Environment said in its latest estimate this month.
The value of Russia's total reserves of fossil fuels and minerals dropped by US$129 billion (10 trillion rubles) as of the end of 2019, primarily as a result of the drop in the value of crude oil, which makes up 80 percent of the value of Russia's natural resources, the ministry said.
The value of Russia's crude oil dropped in 2019 as operating expenditure rose by 7 percent, and capital expenditure (capex) increased by another 7.2 percent, while the discounted net cash flow dropped by 4.9 percent, and the average price of oil in 2019 fell by 2.2 percent, the Russian ministry said.
Oil production in Russia was estimated to have dropped by 0.4 percent year over year in 2019, according to the ministry's estimates.
Last year, the estimates from the same ministry showed that the total value of Russia's oil reserves was US$1.2 trillion at the end of 2018, nearly doubling the valuation over the course of a single year. The value of oil reserves reached some 71.7 percent of Russia's gross domestic product (GDP) in 2018.
The value of oil reserves in Russia will surely take a big hit this year, when the ministry sits down to estimate it at some point next year, because of the crash in prices earlier in 2020.
The price collapse, which hit Russia's budget income since oil is a large chunk of it, forced Russia and its friend-foe Saudi Arabia to agree to a new production cut deal to save the prices from plunging further.
Russia's Energy Minister Alexander Novak is more optimistic than the prevailing concern on the market of a protracted demand recovery, saying last week that he expects oil demand to recover fully from the effects of the pandemic by the second quarter of 2021.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com