Which Russian Oil Companies Have the Most Increase in the Number of Idle Wells
The number of idle oil wells has increased in Russia. According to Bloomberg, their share rose to 18.1% in March from 15.6% in February, the largest since May 2022, when the Russian Federation carried out short-term production cuts amid the first waves of international energy sanctions.
Bashneft and Slavneft announced the largest increase in the share of idle oil wells, Reedus reported. In particular, Bashneft, which operates mainly mature oil fields in the Volga-Ural region, jumped to almost 44% from 29.2% in February. To a lesser extent, major oil producers Rosneft, Lukoil and Tatneft have increased the number of wells shut down. But these figures do not provide information about the productivity of the affected wells, which makes it impossible to assess the actual impact on production, the agency clarifies. Russia has promised since March cut production by 500 thousand barrels per day in response to the G7 and EU imposed price ceiling and other Western energy sanctions. Russia’s Deputy Prime Minister Alexander Novak has delivered on that promise, but official data on Russian oil production is not being released now, and tanker tracking shows no corresponding decline in offshore exports, Bloomberg points out. exceeded four million barrels per day in the week to April 28. At the same time, offshore shipments of crude oil abroad also do not reveal the full picture, the agency notes. Russia has a large domestic oil refining industry and the volume of raw materials it currently consumes is difficult to estimate due to seasonal maintenance. It is also difficult to track the level of flows of oil that is exported through pipelines. According to the International Energy Agency, oil exports from Russia in March were the highest since COVID-19, but revenues from it were almost halved compared to last year. In the first month of spring, an average of 8.1 million barrels of oil were supplied to foreign markets daily. This is the highest rate since April 2020.
Note of the Devon news agency: The rules for the development of hydrocarbon deposits, approved by the Ministry of Natural Resources, indicate that the allowable value of the inactive well stock at the field is 10% with an actual operating well stock of more than 500 units. This percentage increases with a smaller number of wells: for example, if there are from 11 to 50 wells, then the maximum rate of idle wells is 20%. In March, Devon news agency reported that Russia was increasing the number of tankers for oil transportation. From 25 to 35 ships enter the “shadow” fleet every month. In total, about 600 tankers (10% of the world market) are used to transport Russian oil. At the end of January, the Economist estimated the number of tankers used for oil from the Russian Federation at 360 units.
