Russia's oil boom may be running on empty

[babylonsister]

Russia's oil boom may be running on empty



By Tom Lasseter | McClatchy Newspapers


MOSCOW — The Russian oil boom, which has produced a gusher of cash, political power and an opulent elite — and has helped fuel the country's renewed assertiveness in Georgia and elsewhere — is on shakier ground than officials in Moscow would like to admit.

Most of the oil produced after the country's 1998 financial collapse has come from drilling and re-drilling old Soviet oil fields with more advanced equipment — squeezing more black gold out of the same ground — and efforts to develop new fields have been slow or non-existent.

That strategy is potentially disastrous, said Valery Kryukov, who researches oil companies in western Siberia for a government-funded think tank.

"If the situation which exists now stays the same, oil production will start to decline seriously in two years," Kryukov said in a phone interview from his offices in the city of Novosibirsk.

The implications extend far beyond Russia's borders. Last year, Russia was the world's second-largest oil producer. If its output begins to decline or is hampered by inept or corrupt business practices, the price of oil could begin climbing again.

more...

http://www.mcclatchydc.com/251/story/49962.html

[Igel]

1. Russia has severe problems.

For all the Russo-centric jingoism ...

The lifespan's down, the population's dropping.

The ethnic minorities are increasing as a % of population.

They've pulled back from some marginally inhabitable areas.

They have a huge illegal immigration problem in the Far East, such that there are areas where the population is 90% or more illegal Chinese immigrants: Chinese citizens, which presumably will get the same kind of care and attention that "Russian" citizens in Georgia got, should Russia step out of line.

[KharmaTrain]

4. Not To Mention The Incredible Corruption

No sooner did the Soviet system fall than it was replaced by what would best be described as a syndicate...while the "centralized" economy was gone, the corruption wasn't and had no check on it. Large Russian companies and capitalists rose quickly as the first dollars, pounds, francs and DM started to pour in...the view they put on was that Russia was finally embracing capitalism...all was good.

[Raster]

5. Putin is just KGB in a better suit.

[Strelnikov_]

2. 1) Remember to correct the OPEC reserves from the above for 'political' oil

The OPEC countries decided in 1985 to link their production quotas to their reserves. What then seemed wise provoked important increases of the estimates in order to increase their production rights. This also permits the ability to obtain bigger loans at lower interest rates. This is a suspected reason for the reserves rise of Iraq in 1983, then at war with Iran.

In fact, Dr. Ali Samsam Bakhtiari, a former senior executive of the National Iranian Oil Company, has stated unequivocally that OPEC's oil reserves (notably Iran's) are grossly overstated. In an interview to Bloomberg in July 2006, he stated that world oil production is now at its peak and predicted that it will fall 32% by 2020.

[Strelnikov_]

3. 2) Russia is a big country. As the polar/Siberian regions come into play

due to climate change, there will most likely be major finds. They will probably not be able to increase rate, but I expect the tap to run for a long time.

Saudi Arabia/Persian Gulf region (outside of Iraq) has pretty much been picked over.

[bemildred]

6. Then, there's Mexico:

Pemex July Oil Output Falls 12% as Cantarell Declines (Update2)


Aug. 21 (Bloomberg) -- Petroleos Mexicanos, the third- largest supplier of oil to the U.S., said production fell 12 percent in July from a year earlier as output declined at Cantarell, the world's largest offshore oil field.

July's daily output dropped to 2.782 million barrels from 3.166 million barrels in the same month last year, the state- owned oil company, known as Pemex, said today on its Web site. In June, Pemex produced 2.839 million barrels.

Daily production at Cantarell, which first began pumping oil in 1979, plummeted 36 percent in July to 973,668 barrels from 1.526 million, according to an Energy Ministry Web site.

Faster-than-expected declines at Cantarell prompted Pemex to lower its oil production target in July for the second time in as many months. The Mexico City-based company reduced its 2008 daily production target to 2.8 million barrels from 2.9 million.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aJ6JUYFgjw0w&refer=latin_america

[babylonsister]

7. .

[TexasObserver]

8. Russia has long overproduced and is depleting its reserves at record pace

[babylonsister]

9. Sounds like it. Maybe that's why they're in a hurry to get to the Arctic, or

wherever that ice is melting in the cold, cold water/winter. I guess 'first dibs' rules.

[TexasObserver]

10. You are exactly right about the artic.

Russia imports and exports. It's big, and it makes sense to import from the mideast in that region, and export in Asia, like China.

But they have been sucking their reserves out at a rate several times that of others in the world with reserves. They do it for the money. That's why they have expansion in the minds again. No one is interested in seizing land unless it has oil or leads to oil.

[babylonsister]

11. They're running out of oil? This is big, because they've always been

known to be an economy bolstered by oil. I think this is scary. Desperate people do desperate things? Maybe countries also, instead of a lame duck who plays in the sand while there's yet another 'very serious thing' to attend to.

[TexasObserver]

12. they're not running out, but they're running through them

I don't remember the number of years reserves, but it seems to me they're down to 20 years or so left in reserves.

[TrogL]

13. The entire Caspian region may be drying up. Most new wells are fizzles

[leftofthedial]

14. capitalism is a short-term, zero-sum disease

it can not survive its own ruthless amorality.