Russia faces oil quality problems: state study

26th April 2011, Comments 0 comments

The quality of Russian crude is deteriorating sharply, with the world's largest oil producer also doing a poor job replenishing depleting reserves, a government study warned Tuesday.

Russia produced more than 500 million tonnes of oil in 2009 but the country's current reserves can only sustain that rate of production for another 13 to 15 years, the study said.

Russia's current oil production levels mean it is now the world's top oil producer alongside Saudi Arabia.

The ministry of natural resources survey said "Russia has less than 30 percent of oil that 'flows' -- the remaining 70 percent is very heavy, viscous and hard-to-recover oil."

It added that most of the crude being produced now were of the light kind demanded on the world market, meaning that more and more of what Russia has left over in its reserves will demand extra amounts of processing.

Top government officials have issued repeated warnings about too little money being invested in the development of untapped reserves in far-flung regions of eastern Siberia.

Most of the western Siberian reserves closer to Russia's industrial heartland were developed in the Soviet era, with production at those sites going down at a steady rate.

The latest survey showed that, on average, 40 percent of western Siberian reserves had been used, with some sites standing more than two-thirds depleted.

The ministry also noted that the government's hopes of new oil finds in eastern Siberia were turning up empty, with the concentration of reserves discovered there so far "extremely low".

Overall, Russia's spending on new exploration work declined in 2009 by 40 percent, the ministry study said.

The study urged the government to introduce a more open licensing system that would offer private companies easier terms for oil exploration.

© 2011 AFP

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