Monday, June 30, 2014

Future Russian Hydrocarbon Production Depends on Western Technolical Help

Even as the decision to stop gas supplies to Ukraine aggravates tensions with the U.S. and Europe, Russia faces a dilemma: it still needs Exxon Mobil Corp. (XOM:US), Halliburton Co. (HAL:US) and BP Plc (BP/) to maintain output from Soviet-era oil fields and develop Arctic and shale reserves.

Russia will require Western companies to provide the modern drilling and production gear -- and techniques such as hydraulic fracturing -- that are essential to unlocking its $8.2 trillion worth of barrels still underground.

The cutoff to Ukraine’s gas supply adds another layer of complexity for energy companies navigating a shifting geopolitical landscape in the search for new oil and gas supplies. Decision-makers from some of the West’s biggest oil explorers are gathering in Moscow this week at the World Petroleum Congress to pave the way to new deals.

[...]

Without Western expertise and technology, it’s unlikely Russia could sustain its current production levels, much less increase them, David Pursell, an analyst at Tudor Pickering Holt & Co., said in a phone interview. The country has “zero chance” of exploiting deep-water reserves without Western help, he said.


I smell sanctions target.

No comments:

Post a Comment