Russia won’t sell all its oil even if prices are sharply reduced – economist Kalashnikov

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February 15, 2023, 15:32 – BLiTZ – News At the end of 2022, Russian oil companies drilled wells to a record depth over the past 10 years – 28,000 kilometers. The total number of oil wells over the past year has increased by 7% and exceeded the mark of 7800 pieces. However, Deputy Prime Minister Alexander Novak said that Russia plans to cut the country’s daily oil production by 500,000 barrels in March 2023.

On the air of the BLiTZ, ex-Minister of Labor and Social Development of the Russian Federation, Honored Economist of Russia Sergey Kalashnikov announced the need to change the approach to oil production in Russia.

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“The technology of oil production in Russia has not been improved for a long time. It is easier to drill a new well nearby than to achieve the full use of the resources of the old one – this problem dates back to Soviet times. Most oil-producing countries follow the path of maximizing the use of one well. Drilling a new well and equipping it is relatively inexpensive, the problem is how to revive a mothballed well. Russia is now reducing oil production, which means that a certain number of wells will be mothballed. Reopening a well means risks and costs. The risk is that after the well is shut down, oil under pressure begins to go to other reservoirs, to other points, and when it is re-mothballed, which is very expensive, it turns out that there is no oil there anymore.”

Novak’s statement about an imminent reduction in oil production has real grounds, Kalashnikov noted, since oil markets have shrunk for Russia, the number of buyers is limited, and even with dumping, Russia will not be able to sell all its oil.

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