SIZABLE GROWTH PROJECTED FOR RUSSIA'S OIL PRODUCTION

Since mid-1999, average daily Russian crude oil output has grown by over 54 percent, or the equivalent of about 3.3 million barrels per day (mbd), lifting Russian production back onto a par with that of Saudi Arabia and propelling Russia into the forefront as a global oil supplier. Coming after a precipitous decline during the early 1990s that almost halved national output, the growth is very largely due to better and more intensive development of the Soviet-era legacy, chiefly in West Siberia (Russia's most important oil-producing region). CERA's latest Private Report presents an outlook for Russian oil production to 2020, assessing how much longer this West Siberian "brownfield renaissance" can continue, and examining the underlying Russian reserve base, which might easily be twice as much as currently estimated.

- Key uncertainties in the production outlook are largely "above ground" and include the future existence of Yukos and its role in pioneering new approaches to oilfield practices, the constraints of Russian export infrastructure, and a possible worldwide excess in production capacity a few years from now.
- The Russian production profile to 2020 will be largely supported by fields currently in production (FIP) and fields currently under development or under appraisal (FUD/FUA), with only a modest contribution from future discoveries under either of CERA's two production scenarios.
- Russian oil production and liquids capacity could expand to 15.4 mbd (770 million metric tons [mt] per year) by 2020 in an unconstrained (high) case, underpinned largely by FIP, with an increasing contribution from FUD/FUA. Under a "most likely" (constrained) case, expansion is projected to gradually reach about 12.4 mbd (620 mt per year) by 2020. New exploration will contribute only after 2010, and is expected to add 1.1 mbd (55 mt) by 2015 in the high case and 0.8 mbd in the "most likely" case.

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CERA Reports Online, a wholly owned subsidiary of IHS Energy, is a leading advisor to international energy companies, governments, financial institutions, and technology providers. CERA delivers critical knowledge and independent analysis on energy markets, geopolitics, industry trends, and strategy. CERA's expertise covers all major energy sectors--oil and refined products, natural gas, and electric power--on a global and regional basis.