Despite Sanctions, Russia Drilled Substantial Oil in 2022, Report Says
Russian oil companies drilled more at their oil fields in 2022 than in more than a decade, Bloomberg reported Feb. 14, with "little sign that international sanctions" directly harmed upstream oil operations.
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“The industry largely continues working just like before,” said Vitaly Mikhalchuk, head of the research center at Business Solutions and Technologies. “Russia has been able to retain most oil-service competencies, assets and technologies.”
Since the war in Ukraine began a year ago, Russia's oil industry has undergone a substantial change with major Western companies like BP, Shell and ExxonMobil ditching massive investments in Russia. These actions, coupled with export restrictions, set expectations for a devastating stretch for the industry.
Nevertheless, Russian oil rigs drilled a total depth of over 28,000 kilometers in 2022 -- the highest mark in over a decade, the report said. The total number of new wells jumped 7% to over 7,800, Bloomberg added.
International players were responsible for only 15% of Russia's oil services industry prior to sanctions, the report said, and some of the biggest oil-service providers didn't leave following the invasion of Ukraine. SLB and Weatherford International carried on Russian operations with only some limits, Bloomberg said. Another factor contributing to the industry's resilience were decisions by Halliburton and Baker Hughes to sell their in-country businesses to the local management.
The present challenges for the Russian oil industry, though, include obtaining Western high-tech equipment and securing the ability to store oil on a large scale, Bloomberg said, noting sanctions likely will be felt more in the long term.