HomeMediaLatest NewsThe West did not expect the "stubbornness" of the Russian oil industry

The West did not expect the "stubbornness" of the Russian oil industry

09 March 2023

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Business FM radio station on the impact of the Western companies withdrawal from Russia on the prospects for Russian oil production:

“If we talk about some critical technologies that were not available to Russian companies, then this is mainly the shelf. First of all, in the Arctic and Sakhalin. That's where the addiction really was. To some extent, it remains, because Russia lacks its own technologies. If we talk about the Arctic, then they do not exist in the world. Here there was the necessary international cooperation, primarily with Western companies. If we discard the shelf and certain categories of hard-to-recover oil reserves, then there is dependence on foreign technologies and especially on investments. Oil production was low, and it has remained so. Therefore, the fact that the departure of Western companies did not have any particular effect is not surprising. On the whole, of course, there is a problem, and it will gradually increase. I think that the oil industry has a margin of safety for another two or three years. And after that, of course, serious technological problems may begin, primarily related to the development of hard-to-recover reserves. And this, from a theoretical point of view, may lead to a reduction in production by the end of the 2020s precisely due to technological limitations. I think that this drop is unlikely to exceed 10-15%. And then it will be only if relations with Western countries are not restored in principle and all restrictions remain at the current level.”

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