Eastern Siberia: oil and gas

Eastern Siberia is Russia’s most promising exploration and production region with some analysts estimates of ‘undiscovered’ reserves of 80 billion boe. Eastern Siberian oil and gas provinces cover about 3.3 million square kilometres. They extend from the Arctic offshore in the north to Lake Baikal and the mountains of southern Russia. East Siberia Oil and Gas Provinces

The region is home to some of the Russia’s largest green field projects and is the main beneficiary of the recently introduced tax incentives, resulting in a benign fiscal regime and a substantially higher average operating cash-flows per barrel of oil sold.

Historically the region had limited exploration and development due to its size and remote location,  harsh climate, and lack of infrastructure. However, with the decline of production at mature fields in West Siberia, Russian government has has turned its attention to a number of new regions (Eastern Siberia, Timan-Pechora and Northern Caspian), of which Eastern Siberia is the most noticeable one given its proximity to customers in the Asia-Pacific region. Over the recent years the region has seen significant infrastructure development and booming licensing activity as a result of the construction of the Eastern Siberia – Pacific Ocean pipeline, which has created a direct link between Eastern Siberia and the fast-growing Asian markets. With major new infrastructure in place, Eastern Siberian production is forecast to grow rapidly in the next few years, peaking at over 1.3 million b/d around 2017.

The Russian Government has put a lot of trust in the Eastern Siberia by constructing ESPO pipeline and providing to oil producers preferential taxation regime (in the reference to production tax and export duties). Therefore, the region is expected to be the main source of Russia’s production growth over the next 10 years.

(Original article http://irkutskoil.com/section_29/section_64)

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