<Antarctic MeltingThe Oil DrumOpen Thread>

101 comments on Cigar Now?

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RussFag on March 3, 2006 - 11:57pm Permalink | Subthread | Parent | Comments top
If so why does Russia plan to spend tens of billions of dollars on construction of new gigantic trans-Siberian pipeline?
East Siberia and Far East (the size of Canada) are practically not developed. Judge by leery eyes of Russian president when he speaks about oil reserves in public I think there are large eastern oilfields or at least he believes in that.

Andrei, 3500 km east of Moscow.

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Leanan on March 4, 2006 - 12:05am Permalink | Subthread | Parent | Comments top
I don't know.  He posts here sometimes; maybe he'll answer your question.  

Or you can go over there.  The thread in question is Russian production discussion.

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SocraticGadfly on March 4, 2006 - 12:27am Permalink | Subthread | Parent | Comments top
I think that would be China beckoning. If they pay the price, the pipeline will get built.
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RussFag on March 4, 2006 - 12:57am Permalink | Subthread | Parent | Comments top
Why would anyone spend huge money on pipes if there won't be enough stuff to pump trough?
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Heading Out on March 4, 2006 - 1:32am Permalink | Subthread | Parent | Comments top
There may still be some gain to be had from Western technology, since, as is noted here Halliburton and Schlumberger are using horizontal drilling, hydrofracing and other EOR techniques to improve old field production and this potential is also addressed in references to Dave's excellent review of the current Russian situation, by field.  
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AlanfromBigEasy on March 4, 2006 - 1:01pm Permalink | Subthread | Parent | Comments top
Russia is railing large amounts of oil into China now (and China rails them further into their refineries).

Pipelines are MUCH cheaper (and more energy efficient) ways to move oil in quantity.  In the US very little oil is railed, almost all is either pipelined or shipped via water (also more efficient than rail).

Since Russia will be producing large (if some what smaller) quantities of oil for many years to come, the capital investment in a pipeline may well make sense.

Chinese rail lines are well (and sometimes over) used today.  Taking oil off of them would free up space for goods that are trucked today, reducing Chinese oil consumption.  The Chinese seem to be quite serious about not growing their oil consumption too much.

IMHO, China wants the pipeline more than Russia does.

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The Swede on March 5, 2006 - 5:43am Permalink | Subthread | Parent | Comments top
In 2004 Russian oil exports to china was about 6.5m tonnes, or 140,000 boepd. This is doable by rail.

IMO China would want to source more from Russia. And if Russia could up its production in the East, why not sell it to China. On the other hand it might be easier to ship it by sea form Eastern Russia...

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westexas on March 4, 2006 - 9:37am Permalink | Subthread | Parent | Comments top
Note that the Russian Minister of Industry and Energy is concerned about a "a real collapse in oil production" if they don't immediately start encouraging frontier exploration.

http://www.russiaprofile.org/politics/2006/2/6/3211.wbp

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Leanan on March 4, 2006 - 10:24am Permalink | Subthread | Parent | Comments top
The argument in favor of Russia boosting production seems to be "they still have a lot of unexplored areas."  Russian Cowboy doesn't seem to be as optimistic:

Also, the promised polar oil may never be found in reality. The only major oilfield that Russia has in the Arctic Ocean is Prirazlomnoye with about 1.5 Gba of oil. Russian oil companies have been looking for coastal shelf oil, but failed to come up with any major finds in the last 10 years except for the 500 Mba field in the Caspian sea found a month ago by Lukoil. Also, the average cost of producing oil in Russia is climbing fast. It was only $6.7/ba in 2001, $10/ba in 2003, and $15/ba in 2005. In the near future, Kremlin may be kissing goodbye to the fabulous oil royalties it is enjoying now.
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