Russian Oil and Gas Industry: News

PapaDragon wrote:
Christophe de Margerie LNG tanker covers Northern Sea Route in record 6.5 days

More:
http://tass.com/economy/961438

........The Bazhenov formation is already located in areas with developed oil producing infrastructure. Its development is being discussed in scientific, economic, energy industry and political circles from London to Washington. No one knows exactly what's underneath, they only know that it is large. Current estimates for light crude in the Bazhenov range from 600 million to 174 billion tons. As a comparison, the middle of this range is larger than the total initial geological reserves of light oil in all known oil and gas provinces of Russia. Boom.
...............
Just to compare the Bakken to Bazhenov, a 2013 U.S. Geological Survey estimated Bakken-Three Forks recoverable oil reserves to be about 7.4 billion barrels, and 6.7 trillion cubic feet of recoverable natural gas. Bazhenov has about 10 times the oil......

PapaDragon wrote:
Arabs really screwed the pooch back in '14....

When Russia Finally Hops On Shale Bandwagon, OPEC Is Finished

https://www.forbes.com/sites/kenrapoza/2017/08/29/when-russia-finally-hops-on-shale-bandwagon-opec-is-finished/#7e863f851af0

........The Bazhenov formation is already located in areas with developed oil producing infrastructure. Its development is being discussed in scientific, economic, energy industry and political circles from London to Washington. No one knows exactly what's underneath, they only know that it is large. Current estimates for light crude in the Bazhenov range from 600 million to 174 billion tons. As a comparison, the middle of this range is larger than the total initial geological reserves of light oil in all known oil and gas provinces of Russia. Boom.
...............
Just to compare the Bakken to Bazhenov, a 2013 U.S. Geological Survey estimated Bakken-Three Forks recoverable oil reserves to be about 7.4 billion barrels, and 6.7 trillion cubic feet of recoverable natural gas. Bazhenov has about 10 times the oil......

kvs wrote:

PapaDragon wrote:
Arabs really screwed the pooch back in '14....

When Russia Finally Hops On Shale Bandwagon, OPEC Is Finished

https://www.forbes.com/sites/kenrapoza/2017/08/29/when-russia-finally-hops-on-shale-bandwagon-opec-is-finished/#7e863f851af0

The Bazhenov formation is something special on this planet.   People should not fob it off as delusional Russian dreams.   Thanks to lack of
"advanced" (aka desperate) drilling for economically non viable oil and gas in Russia, such formations have not been touched.    

https://en.wikipedia.org/wiki/Bazhenov_Formation

The EIA estimates are on the money.   This is prime source rock which is "tight" because of the shale-like rock instead of the typical sandstone or dolomite which
are much more porous.    From all the geological details, the reserves in this formation are huge.    The deposits in this formation are not degraded like the tar sands.

JohninMK wrote:NordStream2's political impact is starting the crank up. I really wonder if some members of the EU have really absorbed the ramifications of the start of increased supplies of gas to China around the start of 2020. In particular that it provides a revenue stream should supplies to Europe be interrupted with the end of transit through Ukraine and no NordStream2 online. Whilst Russia is pretty emphatic that it does not break gas supply contracts, if those contracts run out (as the Ukraine transit ones will) then what?


The European Commission has drawn up plans to ensure that a new Russia-Germany gas pipeline - Nord Stream 2 - does not reshape EU energy markets for Russia's strategic gain.

But the draft plan, a classified 10-page document seen by EUobserver, will only take effect if EU states give the green light, amid Germany's likely preference for handling Nord Stream 2 talks with Russia without EU involvement.

   Energy commissioner Maros Sefcovic likely to lead potential talks with Russia (Photo: ec.europa.eu)

The plan calls for an EU Council decision "authorising the opening of negotiations on an agreement between the European Union and the Russian Federation on the operation of the Nord Stream 2 pipeline".

It says the agreement is to "ensure a coherent regulatory framework contributing to market functioning and security of supply".

It also says the Commission should be the "head of the Union's negotiating team", but that it would conduct the Russia talks "in consultation" with "a special committee" of EU states' officials.

In what is likely to feel like poison in Russia's ear, the 10-page paper insists, in an annex, that Nord Stream 2 should abide by EU laws on "unbundling" and "third party access".

More on this at https://euobserver.com/energy/139023

In effect, the fracking companies have been drilling into oil deposits already owned by conventional oil companies…
and damaging the existing wells in the process. This is likely to result in lengthy court disputes that will add to the financial
woes of the fracking companies.

Sanctions have not had any real impact on Russian oil and gas giant Gazprom. It toppled Exxon's 12-year reign as the world's leading energy company, according to S&P Global Platts rankings released on Sunday......

MOSCOW, December 21. /TASS/. Chief Executive Officer of Russia’s Gazprom company Alexey Miller and Chairman of China National Petroleum Corporation (CNPC) Wang Yilin have signed an agreement on the basic conditions of gas supply from Russia’s Far East to China, Gazprom said in a statement.

"The document determines the main parameters of the future supplies, including their volume, the contract period, the timeframe to start the deliveries, the period to increase supplies and the border crossing point. The parties plan to sign the contract in 2018," the statement reads.

During the working meeting in Beijing, the sides gave high marks to gas partnership, noting that the companies are successfully implementing the project to export Russian gas to China via the so-called ‘eastern route’, and cooperating in a number of other areas, including underground gas storage, gas power generation, use of gas as motor fuel.

China’s state oil and gas company CNPC is Gazprom’s main partner in the country.

Currently, Gazprom is building the Power of Siberia gas pipeline, which will pump natural gas from the giant Chayanda oil and gas condensate deposit in Yakutia and the Kovykta gas condensate field in the Irkutsk Region in Eastern Siberia to deliver gas to the domestic market (via Khabarovsk to Vladivostok) and further on for exports to China. The pipe's section aimed for China will be built near Blagoveshchensk. The eastern route stipulates the supply of 38 billion cubic meters of natural gas to China annually within 30 years.

In 2017, Gazprom investment in the Power of Siberia pipeline increased to 158.811 billion rubles ($2.7 bln) from 76.162 billion rubles ($1.3 bln) .

The terms of the partnership in design, construction and operation of the cross-border zones of the gas pipeline are defined by an intergovernmental agreement dated October 13, 2014

In 2015, Gazprom and CNPC signed an agreement on the basic conditions of pipeline gas deliveries from Western Siberia to China via the "Western" route (Power of Siberia-2 pipeline). Initially supplies are envisaged at 30 billion cubic meters of gas per year.

Also in 2015, Gazprom and CNPC signed a memorandum of understanding on the project of pipeline shipments of natural gas to China from Russia’s Far East.

Despite years of effort from the EU, Russia’s grip over natural gas supplies in Europe is tightening, not waning.....

Europe’s set to be stuck with a higher oil bill as Russia shifts more of its supply to the Chinese oil market.

As the world’s second-biggest economy buys more, crude shipments from the Baltic Sea port of Primorsk will be cut, according to industry consultant FGE. The reduction will push up the price of varieties available for sale to Europe. Russia is already the biggest supplier to the China, and will probably boost exports to the country by 200,000 barrels a day in 2018, FGE said.

After a glut sparked the biggest price crash in a generation and starved Russia of oil revenues, the nation sought to boost market share in the world’s top importer. It’s now supplanted Saudi Arabia as the top exporter to China, even as the two producers lead efforts to shrink the global oversupply by curbing output. A pipeline that transports crude from the East Siberia-Pacific Ocean system has helped its mission to increase volumes.


“Russia is starting in effect immediately to shift crude exports away from Europe to China,” FGE said in a Dec. 29 note. “While we see overall crude exports from Russia flat year-over-year in 2018, this is bullish news for the Urals price due to its lower availability, in particular from the port of Primorsk.”

This increase in China-bound deliveries is expected to cut exports from Primorsk in January and February, and reduce pipeline flows to Eastern Europe in March, according to FGE. Shipments of the Urals grade from the port in January will likely fall by 160,000 barrels a day, compared with a year ago, while supplies from Novorossiysk in the Black Sea could remain largely flat, with some possible upside, according to the note.

The diversions have made Urals prices stronger at the end of December, compared with a month before, according to FGE. The grade turned about 60 cents a barrel costlier relative to London’s Brent crude, the benchmark for sales of the variety, the industry consultant said. Brent was at $66.67 a barrel at 9:35 a.m. in London, rising from an average level of $64.09 last month.

Pipeline Flows

China imports the bulk of Russian oil via inland pipes and seaborne shipments from the eastern ports of Kozmino, De-Kastri and Prigorodnoye. A second conduit between the two countries began operations on New Year’s Day, doubling China’s ESPO crude import capacity to 30 million tons annually, or about 600,000 barrels a day. The two lines run parallel to each other between Mohe at the border and Daqing in northeast Heilongjiang Province.


The Asian nation has also sought to expand its energy relationship with Russia. CEFC China Energy Co., a firm that’s grown from a small local trader to a global deal-making juggernaut, in November sold its first cargo of Russian crude after buying a $9 billion stake in Rosneft PJSC last year. The Russian energy giant will supply the Shanghai-based company with as much as 60.8 million tons, including the Urals, ESPO and Sokol grades, over five years.

Russia supplied 5.12 million tons of crude to China in November, official customs data show, the equivalent of about 1.3 million barrels per day. It also aims to start natural gas sales via the Power of Siberia pipeline by December 2019.

PapaDragon wrote:'
I don't enjoy reading economic articles (I find them quite dry and dull) but this one brought me great satisfaction. Also some folks here from old MP.net days will remember when we were warning that this exact thing will happen within several years and how everyone giggled... I don't think they would be giggling today. 


Russia-China Oil Friendship Makes Crude Costlier for Europe

Russia will deliver liquefied natural gas (LNG) to the US, Kommersant daily reports. The reason for the deal is the sharp rise in gas prices on the east coast of the US.
An LNG tanker belonging to French energy company Engie is now shipping from the British port of Isle of Grain to an American terminal, Everett, located near Boston.

The gas being shipped is from Russia’s Yamal LNG plant, according to the newspaper. The tanker is due to arrive in the US on January 22.