Russia recovers rate of oil production, finishes wells as demand in oil expected to increase soon

Source : 112 Ukraine

And yet, Russian government refuses to comment on the actual number of new wells
17:24, 25 June 2020

Yegor Aleyev/Tass

Russia's oil industry could see a new rise, after suffering a fall due to the economic effects of Covid-19 pandemic. Reuters wrote this, referring to its sources involved in the respective scheme. 

According to these people, "at least two state-owned banks, Sberbank (SBER.MM) and VEB plan to lend oil firms some 400 billion roubles ($6 billion) at effectively almost zero interest rates to drill about 3,000 unfinished wells".

The article compares the situation in the oil industry with that in the U.S., pointing out that "U.S. shale producers tend to drill but not complete wells when oil prices are low, rather than freezing all activity, so they can finish off the wells and quickly boost production when demand picks up". Meanwhile, Russia tends to choose the mechanisms of finishing its wells rather than drilling new ones.

Related: OPEC countries, Russia extend deal to reduce oil production

An insider hired as a consultant for Russian oil companies told Reuters that "the new wells would add at least 200,000 barrels per day to output based on average flow rates but if their assumptions about large reserves pan out the wells could boost output by 2 million barrels".

Meanwhile, Russian Energy Minister Alexander Novak and his deputy Pavel Sorokin keep refusing to comment on the number of wells or the oil amount that could be produced within these wells.

Related: Russia to reduce oil production by over 41 million tons in 2020

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