Alexander Novak Has Called for Stimulating the Development of Hard-to-Recover Oil Reserves
It is necessary to fine-tune the tax system in the Russian Federation in order to stimulate the development of hard-to-recover oil reserves, as this will make investments in both reserves and technologies economically viable, according to Alexander Novak, Deputy Prime Minister of the Russian Federation.
“As of today, hard-to-recover, high-water-cut, and depleted reserves account for approximately 60 percent of all reserves. To stimulate their development, the fiscal system needs to be adjusted, which will make investments in new categories of reserves and technologies profitable.
This, in turn, will lead to a surge in investment and will strengthen the role of the oil industry as a driving force of the domestic industrial and scientific sectors,” Novak wrote in an authored article for the journal Energy Policy.
He emphasized that the development of oil production will also play an important socio-economic role, contributing to the growth of strategically significant regions, including the Arctic, Eastern Siberia, and the Russian Far East.
In addition, according to the Deputy Prime Minister, the Energy Strategy of the Russian Federation through the year 2050 includes plans to continue improving mechanisms for stimulating geological exploration and subsoil use, including the creation of test sites for the piloting of new technologies.
“This will make it possible to bring more than 5 billion metric tons of new reserves into production, ensure 100 percent replenishment of the mineral resource base, and support the development of strategically important regions such as the Arctic, Eastern Siberia, and the Russian Far East,” Novak explained.
