The European Commissioner for Energy Kadri Simson said that the voluntary reduction of oil production announced by Russia in March 2023 by 500 thousand bpd was actually a forced step due to the lack of its own technologies.
There are few signs that Western sanctions or the withdrawal of some large Western companies from Russia have directly harmed oil exploration and production operations now. This also explains the recovery of oil production in Russia in the 2nd half of 2022, even despite the introduction of additional restrictions on its export.
According to the Trofimuk Institute of Petroleum Geology and Geophysics, the volume of production drilling in Russia and the number of commissioned oil wells in Russia increased markedly in 2022. The total volume of penetration in production drilling in Russia in 2022 amounted to 28.4 thousand km, which is 8.8% more than in 2021 and is the highest in more than 10 years. The number of wells put into operation increased by 6.8% and exceeded 7.8 thousand, while most of the key oil companies exceeded the indicators of 2021.
Russia was able to increase the volume of drilling wells under sanctions pressure due to 3 key factors:
- large foreign companies accounted for only 15% of the oilfield services segment in Russia in 2021;
- the main part of this market is occupied by Russian companies, in particular, the own divisions of Rosneft, Surgutneftegaz and Gazprom, so the departure of several Western oilfield service companies from Russia did not have a critical impact on drilling volumes;
- 2 large oilfield service companies – Halliburton and Baker Hughes – have sold Russian assets to local management.
And the problem of the shortage of Western high-tech equipment is being solved, including through gray imports through friendly states.