Letter from Moscow: April 2014

摘要

April saw two developments that may have a significant impact on Russian oil sector development over the long term and lead to further industry consolidation. First was the discovery of a major new oil field, dubbed Velikoye (“Grand”) in southern Russia. The field is estimated to have reserves of 300 million mt (2.2 billion barrels) of crude and 90 Bcm of gas, the first discovery of this size in Russia since 1991. The location of the discovery is itself a surprise. It was not made in East Siberia or the Arctic, which are seen as the most promising, if challenging, new oil and gas provinces, nor indeed in Russia’s vast shale formations, which are thought to hold enormous potential. It came instead in the well-explored Astrakhan region, where hydrocarbons, mostly gas, have been in production since the 1950s.