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Strong Outlook for Russia's Energy Sector - Report by BP
January 20, 2014 10:28

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BP, one of the world’s oil majors, has presented its global energy outlook until 2035, with Russia featuring prominently thanks to its steady oil and gas production volumes and growing interest to shale gas and tight oil.
According to BP, between 2012 and 2035, Russia’s domestic energy production and consumption will grow by 21 percent and 20 percent, while its share of global energy production and consumption will both decline slightly from 10 percent to 9 percent, and from 6 percent to 5 percent, respectively.
BP believes Russia will retain the title of the “world’s largest primary energy exporter, with net exports of 736 Mtoe”. “Russia’s liquids production (11 Mb/d in 2035) will trail only Saudi Arabia and the US”, says the report. BP projects that tight oil production will start after 2020 and gradually edge up to 7 percent of the country’s total by 2035.
Russia’s largest fields of unconventional oil are found in the Bazhenov, a formation in Western Siberia that could hold the largest accumulations of shale oil on the planet, according to an estimate given in one of the Financial Times reports. “The dense rock could contain as much as 100bn barrels of recoverable oil, making it five-times larger than North Dakota’s Bakken shale, the engine of America’s oil renaissance”, says the FT. You can find the original report by the Financial Times here.
The Bazhenov is so huge that it has plenty of oil for all the Russian petroleum producers, including Rosneft, Lukoil, Gazprom Neft and Surgutneftegaz.
Gas production (79 Bcf/d in 2035) will remain largely conventional, with shale gas contributing only 5 percent by 2035. Nevertheless, Russia will still be the second largest in the world, behind the US, says the study.
Consumption growth will be mainly driven by nuclear and hydro power, gaining 72 percent and 34 percent, respectively. Renewables will continue to be an area largely untapped as their “share of demand will reach just 1 percent in 2035 versus an 11 percent average in the OECD”.
BP acknowledges Russia’s drive to boost energy efficiency but is cautious not to overrate its results. According to the report, the country’s “energy intensity will remain about twice as high as the OECD average”, which is believed to reflect an “earlier stage of post-industrial development and harsh climate”.
And, finally, in terms of environmental impact, “Russia’s CO2 emissions will grow by 14 percent, well below energy consumption growth”, says the report.

You can download the BP Russia Insights here and read more about the BP Global Energy Outlook 2035 here. 

Author: Mikhail Vesely

Tags: Russian oil BP    

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