Insight: Russia's Bazhenov - a long, slow shale oil revolution

Wed Apr 3, 2013 9:19am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Melissa Akin

TYUMEN, Russia (Reuters) - Forty-five years after its accidental discovery deep under the swamps of West Siberia, the race is now on to develop the world's largest shale oil resource, Russia's Bazhenov.

A drilling push begins in earnest this spring, spurred by President Vladimir Putin's promise to loosen the Kremlin's grip on proceeds from its natural resources in hopes of sparking a shale revolution aimed as much at remaking Russia's oil industry as at raising output.

ExxonMobil (XOM.N: Quote) and Russian state oil company Rosneft (ROSN.MM: Quote) are headlining the new phase of exploration to see whether Bazhenov lives up to its billing.

Russian producers have already reported 500 million metric tons (551.16 million tons), or 3.5 billion barrels, of recoverable crude oil reserves in Bazhenov to the Russian government.

Much studied but largely untapped, it lies in impenetrable black clay beneath existing oilfields covering most of West Siberia, whose westernmost hub is the oil town of Tyumen, 1,700 kilometers (1,060 miles) northeast of Moscow.

"Back when I worked in exploration, one of our geologists called it the wild black stone," said Tatyana Smagina, head of reserves management at the Tyumen Oil Research Centre, part of Rosneft.

The centre holds core samples from 30 years of drilling in West Siberia that are studied to help determine where Russia's new oil will come from.

The government now estimates that the wild black stone could yield 1-2 million barrels per day by the end of the decade.   Continued...

A vessel containing oil is placed on core samples of oil-bearing rock from Russia's oil heartland in West Siberia at a warehouse of the Tyumen Oil Research Centre in Tyumen February 12, 2013. REUTERS/Maxim Shemetov