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Gazprom Neft to develop hard-to-recover oil production technologies in conjunction with the Russian government and the Khanty-Mansi Autonomous Okrug-Yugra

Alexander Novak, Deputy Prime Minister of the Russian Federation, has confirmed the adoption of the federal “Technologies for the Development of Hard-to-Recover Hydrocarbons” project. This document, which represents a joint initiative between the Ministry of Energy of the Russian Federation, Gazprom Neft and the Administration of the Khanty-Mansi Autonomous Okrug-Yugra, is aimed at developing innovative enhanced oil recovery (EOR) methodologies and creating profitable domestic technologies for discovering and developing “hard-to-recover” hydrocarbon reserves. Implementing this project could give Russia up to 50 million tonnes in additional oil production — at new and existing fields in Western Siberia — every year by 2030.

This federal project is intended to promote the creation of domestic Russian technologies for developing unconventional resources, first and foremost at the Bazhenov Formation — the world’s largest source of unconventional hydrocarbons. Geological reserves (reserves initially in place (RIIP)) at the Bazhenov Formation stand at more than 60 billion tonnes of oil. Gazprom Neft has almost completed its development of an industrial technology for producing Bazhenov hydrocarbons. No fewer than 15 innovative products are expected to be developed under this federal project, with approaches to multi-stage fracking also being improved.

Supported by the Government of the Russian Federation, Gazprom Neft will continue its development of chemical flooding technologies for extending production at mature fields. A considerable proportion of these kinds of assets are concentrated in the Khanti-Mansi and Yamalo-Nenets Autonomous Okrugs. Implementing planned initiatives could give the company additional production in the order of 225 million tonnes of oil.

A third area of focus under this federal project concerns developing technologies for discovering Paleozoic reserves — the resource potential of which exceeds 20 million tonnes in Western Siberia. A key tool in implementing this federal project will be launching technological test-sites at which new solutions for developing hard-to-recover oil will be tested and deployed. Pilot facilities in the Khanti-Mansi Autonomous Okrug-Yugra will also analyse the effectiveness of various regulatory regimes in improving government policy in subsoil usage.

“Approximately 60% of Russia’s hydrocarbon reserves are currently deemed to be ‘hard-to-recover’ reserves. Implementing this federal project will make it possible to develop hitherto inaccessible resources — which could increase Russia’s oil reserves by 3–6%. In addition to which, we will be creating an additional source of tax revenues, and thousands of jobs, as well as making a major contribution to developing a market for Russian technology in developing hard-to-recover reserves, the potential of which is estimated at ₽200 billion a year.”
Alexander Novak
Alexander Novak Deputy Prime Minister of the Russian Russian Federation
“This project is an example of effective cooperation between Russian federal and regional government, and business. Together we are directly addressing two of the key challenges facing the industry. Firstly, we’re developing Russian technologies for prospecting for and developing hard-to-recover and unconventional reserves — which are only going to increase as a proportion of total production. Secondly, we are faced with the task of extending the useful lifecycle of mature fields — by developing enhanced oil recovery technologies. This is important not just for the oil industry, but also for those regions of Western Siberia where many upstream assets are, already, at an advanced stage of development.”
Alexander Dyukov
Alexander Dyukov Chairman of the Management Board, Gazprom Neft
Notes for editors

The “Technologies for the Development of Hard-to-Recover Hydrocarbons” federal project expands Gazprom Neft’s work on creating tools for developing unconventional hydrocarbons. Gazprom Neft has been working with the Ministry of Energy of the Russian Federation on creating technologies for developing Bazhenov Formation reserves since 2017. During that time the company has, through deploying its own solutions, almost halved the cost of producing Bazhenov oil — from ₽30,000 per tonne at the start of the project in 2017 to ₽13,000 per tonne by 2021.

The “Technologies for the Development of Hard-to-Recover Hydrocarbons” programme is due to form part of the “Developing the Oil and Gas Industry” initiative under the government’s “Energy Development” programme.

The project is designed to promote the development of Russia’s oil and gas industry, develop a market for high-tech oil and gas services, and promote the establishment and localisation of new production facilities — including facilities for manufacturing fracking equipment, for mobile surface facilities and well drilling, and for new kinds of reagents and surfactant materials for enhancing oil recovery. This work will involve industrial as well as oil and gas companies, together with scientific and educational establishments throughout Russia.

Participants involved in implementing the project include specialists from Gazprom Neft, the Administration of the Khanty-Mansi Autonomous Okrug-Yugra, the Ministry of Energy, the Ministry of Industry and Trade, and the Ministry of Science and Higher Education, together with Russian subsoil agency Rosnedra and representatives from partnering technology companies.

The Bazhenov Formation is Russia’s main source of unconventional resources, containing most of Russia’s shale oil. Bazhenov deposits are spread throughout the Western Siberian oil and gas province, covering an area of more than one million square kilometres. A conservative forecast suggests recoverable reserves here could increase to 760 million tonnes by 2025.

Pre-Jurassic (Paleozoic) deposits date back to the formation of the earth’s crust about 540 million years ago. Pre-Jurassic deposits are marked by their universal oil-bearing capacity, complex geology and very deep occurrence (2.5 to 5.5 kilometres). The main challenge in working with Paleozoic deposits is the lack of prospecting technology. Experts estimate Paleozoic oil reserves in Western Siberia at more than 20 billion tonnes — matching total current recoverable reserves in Russia as a whole.

Chemical enhanced oil recovery (CEOR) refers to technologies that increase the oil recovery factor (ORF, a metric indicating what proportion of total reserves are produced from strata) through the use of various kinds of chemical flooding. About 80% of fields in Western Siberia are marked by a high water cut.