The Wall Street Journal explains the toll its war with Ukraine has taken on the Russian oil industry. Georgi Kantchev, Daniel Kiss, and Ming Li report:
President Trump has stepped up pressure on the Kremlin to stop its invasion of Ukraine. But even an unlikely swift end to the war and sanctions, which analysts say have already set the sector back years, wouldn’t solve all of Russia’s problems.
“Getting oil out of the ground is harder and more expensive but the deteriorating resource base means you have to run faster every year just to stay in place,” said Matthew Sagers, Russia expert at S&P Global Commodity Insights. “It’s essentially a long, slow goodbye for Russian oil.”
Depleting resources
The share of the country’s oil reserves described as hard-to-recover will rise to 80% by 2030, from 59% now, according to Russia’s Energy Ministry. “This means that both capital and operating costs to bring this resource out of the ground will grow,” Deputy Energy Minister Pavel Sorokin said at a conference last year.
“The golden era of Russia’s giant conventional oil fields is in the past,” said Daria Melnik, vice president upstream research at consulting firm Rystad Energy.
Read more here.
