- •Contents
- •Foreword
- •Industry snapshot
- •Industry snapshot
- •Reserves
- •Oil output
- •Oil output
- •Gas output
- •Gas output
- •Refining
- •Refining
- •Upstream
- •Upstream
- •Oil output
- •Gas output
- •New wells
- •Well-stock management
- •Well productivity
- •Reserves
- •Reserves
- •Oil reserves
- •Gas reserves
- •Reserve replacement
- •Reserve replacement
- •Refining
- •Refining
- •Capacity, throughput, utilisation
- •Light products yield
- •Complexity
- •Complexity
- •Modernisation plans
- •Capex
- •Capex
- •Oil & gas sector capex
- •Crude exports
- •Crude exports
- •Crude exports by market, company and direction
- •Russian crude exports in the FSU context
- •Crude export proceeds
- •Refined products exports
- •Refined products exports
- •Analysis by product
- •Gas balance
- •Gas balance
- •Domestic sales
- •UGSS balance
- •Appendix I: Reserves classifications
- •Appendix I: Reserves classifications
- •Russian reserves definitions
- •Western reserves definitions
- •Appendix II: Pricing
- •Appendix II: Pricing
- •Monthly pricing trends
- •International crude oil pricing
- •Domestic crude oil pricing
- •Domestic product pricing
- •International gas pricing
- •Domestic gas pricing
- •Gas tariffs
- •Appendix III: Regulation and tax
- •Appendix III: Regulation and tax
- •Regulatory overview
- •Licensing
- •Environmental protection
- •Oil and product transportation
- •Transportation costs
- •Typical crude export route costs
- •Volume and price controls for gas
- •Tax regime
- •Mineral Extraction Tax (MET)
- •Crude-export duty
- •Excess profits tax
- •Specific taxes applied to natural gas
- •Taxation of offshore projects – special treatment
- •Appendix IV: Sanctions
- •Appendix IV: Sanctions
- •Summary
- •Appendix V: Who’s Who
- •Appendix V: Who’s Who
- •Key policymakers
- •Company heads
- •Disclosures appendix
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New wells
In 2018, 6,236 new wells were drilled by oil VICs, a 3.9% reduction YoY. We associate this decline with both the reduced incentive to invest as a result of OPEC+ production constraints, as well as technological innovations which call for fewer but more complex and expensive well stock.
Figure 20: Oil companies’ new wells vs production growth
YoY increase in the number of new wells |
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YoY crude oil and condensate production growth (r.h. scale) |
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7,000 |
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14.0% |
6,000 |
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12.0% |
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5,000 |
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10.0% |
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4,000 |
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8.0% |
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6.0% |
3,000 |
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4.0% |
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2,000 |
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2.0% |
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1,000 |
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0.0% |
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0 |
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-2.0% |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
Source: Ministry of Energy, InfoTEK, Interfax, Renaissance Capital
Rosneft remains the leader in terms of the number of new wells completed with the share of 43% in total Russian drilling. In 2018, the company saw a 3.2% increase in the number of new well completions, driven by core upstream assets in West Siberia, chiefly Samotlor (+49% YoY), offset by a normalisation of the development activities at Yuganskneftegaz (- 9% YoY). This increase followed a 21.2% rise in the number of completed wells in 2017 and a 30.6% increase in 2016.
Surgutneftegas demonstrated the highest growth rate in terms of the new wells introduced, increasing completions by 14.2% YoY in 2018. Still, the number of newly commissioned wells was down by 8% from the peak level achieved in 2011. LUKOIL decreased the number of wells by 0.8% associated with the reduction in drilling volumes in West Siberia. This followed an increase of 14.9% in 2017. Gazprom Neft decreased the number of new wells completed by 16.3% YoY, which we associate with the reduced drilling at the core brownfields to comply with OPEC+ restrictions, slightly offset by continued ramp-up at the Novoportovskoye field (+50% YoY). Tatneft decreased the number of new wells by 48.0% in 2018 – its growth rate lower than that of all other VICs, following a 69% surge in drilling volumes in 2017. Bashneft’s continued to demonstrate a negative dynamic in terms of new wells commissioning, declining 8.3% YoY, driven by the Trebs & Titov field (-73% YoY) and Burneftegaz (-33% YoY). In 2017, Bashneft also saw a decline of 7.0%. Slavneft’s volumes continued to increase for the second year in a row after two years of consequent declines, up 13.4% YoY in 2018. Russneft’s also continued to add new wells, up 5.8% in 2018 and 17.6% in 2017. NOVATEK intensified drilling activities in its consolidated assets, adding 11 new wells (+83% YoY) in 2018.
Figure 21: New wells completed in 2011-2018, by company
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2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
YoY |
Oil companies |
5,624 |
5,582 |
5,170 |
4,973 |
4,896 |
5,613 |
6,491 |
6,236 |
-3.9% |
SurgutNG |
1,403 |
1,325 |
1,266 |
1,043 |
1,077 |
1,155 |
1,126 |
1,286 |
14.2% |
Slavneft |
217 |
259 |
168 |
209 |
189 |
173 |
179 |
203 |
13.4% |
Russneft |
168 |
136 |
92 |
100 |
74 |
102 |
120 |
127 |
5.8% |
Rosneft |
1,190 |
1,248 |
1,637 |
1,455 |
1,655 |
2,162 |
2,621 |
2,705 |
3.2% |
TNK-BP |
680 |
489 |
0 |
0 |
0 |
0 |
0 |
0 |
0.0% |
LUKOIL |
739 |
1,021 |
993 |
1,061 |
727 |
685 |
787 |
781 |
-0.8% |
Bashneft |
84 |
42 |
45 |
87 |
139 |
143 |
133 |
122 |
-8.3% |
Gazprom Neft |
809 |
759 |
713 |
781 |
722 |
700 |
691 |
578 |
-16.3% |
Tatneft |
335 |
303 |
256 |
238 |
313 |
494 |
835 |
434 |
-48.0% |
NOVATEK |
0 |
16 |
22 |
23 |
0 |
25 |
6 |
11 |
83.3% |
Source: Ministry of Energy, InfoTEK, Interfax, Renaissance Capital
Renaissance Capital
20 June 2019
Russian oil & gas
New wells completed by VICs decreased by 3.9% YoY to 6,236 in 2018
23