1.1. Russia’s oil and gas industry - a historical review
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The first oil and gas fields
The decision to begin developing Russia’s oil industry was taken in the 19th century when the first fields were discovered up in the Baku region, on the Apsheron Peninsula, and in the Caucasus. Next, oil was discovered in Krasnodar Krai, on the Cheleken Peninsula, in Timan-Pechora province, and on the island of Sakhalin.
| Oil production in the early years of development of Russia's oil industry | |
| Year | Oil production, millions of tonnes per annum |
| 1880 | 0.4 |
| 1886 | 1.9 |
| 1890 | 3.9 |
| 1896 | 7.1 |
| 1900 | 10.9 |
| 1910 | 11.3 |
Following the Russian Civil War (1918-1920), Russia’s oil economy was completely destroyed. In May 1920, the Soviet authorities nationalised the Apsheron oil fields. As of 1920 in Russia, and 1923 in the whole Soviet Union (USSR), the oil industry only existed in the form of a State monopoly.
By 1945 over 150 oil and gas fields were discovered in the USSR. Just prior to and after the Great Patriotic War (1941-1945), fields were exploited in the Volga-Urals oil and gas-bearing oblast, while fields later appeared in West Turkmenistan, Kazakhstan, in Stavropol Krai, the Ukraine and Belarus.
For your information:
The first oil pipeline was built in the USA in 1865 and measured 6 km in length.
The Soviet Union’s oil and gas industry only entered a phase of systematic development in the post-war years. In the 1950s and 60s, one of the world’s largest oil and gas bearing reservoirs was explored in West Siberia, and significant oil fields were discovered there. Intensive oil development and production began in the Tyumen district, key among the petroleum-extracting districts of West Siberia.
The first system of pipelines for transporting hydrocarbons
The first pipeline in Russia was installed in 1878 in the Baku region and stretched from the oil fields to the oil refinery. From 1897-1907, the longest producing pipeline in the world at that time (835 km) was built between Baku and Batumi, with a diameter of 200 mm and 16 pumping stations. The next step in the construction of oil industry installations was linked to the development of fields in Bashkiri, Tatari and the Kuibyshev oblast.
Initial offshore developments
The first offshore developments in the former USSR began in the 1920s on the Caspian Sea. The Caspian region became the focal point for analysing the technical characteristics of offshore oil fields. Here, the first trial was undertaken in relation to constructing drilling platforms. Sakhalin became the second such region.
The probability of opening up new, large-scale oil and gas deposits on the continent had already diminished by the start of the 1970s. At this time, exploration work on the Russian shelf proceeded very slowly. During this period, Soviet scientists substantiated the future prospects and actuality of conducting geological survey work on the Continental shelves of seas within the Russian Federation with a view to discovering hydrocarbon deposits which could make up for losses in terms of mining deposits on land.
In order to create a stable energy base for the USSR, a resolution was passed on accelerating the development of offshore work on coastal sections of the Arctic waters. The shelves of the Arctic seas were seen as having a great potential, with estimated natural gas resources in the subsoil of the Barents, Pechora and Kara Seas alone of 70 trillion cubic metres.
For your information:
A Continental shelf is the flattened part of the underwater, outlying bedrock adjoining the mainland, which is characterised by a common geological formation.
The first geophysical surveys of the Barents Sea were conducted by specialists of the Arctic Geology Research Institute (Leningrad) in 1962. In January 1979 the Murmansk marine, geological, geophysical, oil gas expedition “Soyuzmorgeo” of the Gas Industry Ministry of the USSR (now known as the “Sevmorneftegeofizika” state company) was established in Murmansk and, in July 1979, the “Arcticmorneftegazrazvedka” trust was created within the same Ministry. This heralded a new phase in the study and surveying of resources on the Arctic shelf.1
Here’s a thought…
According to data from Russia’s Ministry of Natural Resources, there are 13 billion tonnes of oil and 20 trillion cubic metres of gas, in reserves which could be exploited by 2020. Around 66.5% of these resources are located on the shelves of the northern Barents and Kara Seas.
By the end of 2002, in the Barents, Pechora and Kara Seas, and also in the Bay of Obsk, 15 oil and gas fields had been explored. In terms of size, three of these are classified as unique, nine as large-scale, two as being of average size and one small. According to the most recent estimates, up to 80% of Russia’s potential oil and gas reserves are concentrated on the Arctic shelf.2
Discussions about borders on the seabed and continental shelves’ are currently a hot issue. Today, this is being regulated by the UN Convention on the Law of the Sea (UNCLOS), which opened for signatories in 1982, and was ratified in 1994. Russia, Canada and Norway are amongst the signatories.
The signatories have the exclusive right to the resources situated closer than 200 nautical miles from shore. The Arctic Ocean is shallow, and the continental shelf stretches longer than 200 miles. The Convention opens up for the signatories to manage territory outside the 200 mile zone, if this area is a prolongation of the continental shelf. In order to achieve this, the countries have to apply to the “commission on borders on the continental shelf”, whose headquarters is located in New York. This commission determines the legitimacy and scientific foundation of the pretensions specified in the claim to expand the state’s borders.
Countries which signed the Convention prior to 1994 may submit a claim until 2009.
In 2001, Russia filed an application to increase its continental shelf by 1.2 million square kilometres. At the end of 2006, Norway filed an application which challenges the same portion of the shelf as Russia.3 In order to justify a claim to expand their economic zone in the Arctic, Russia must prove scientifically that the shelf of the Arctic Ocean is an extension of the Siberian continental plateau. According to the All-Russian Scientific Research Institute of World Ocean Geology and Mineral Resources, potential hydrocarbon resources on this territory are not less than 9-10 billion tonnes of standard fuel.4 Resolving this dispute is within the framework of the Convention, and the results will influence the oil and gas potential of two countries.5
Footnotes:
[1] www.komiinform.ru (2006 year) Back
[2] http://www.duma.gov.ru/cnature/press_club/tarasuk_xxivek.htm (2006 year) Back [3] Newspaper «Gazeta», 03.04.2007, Galina Antonova Back
[4] http://lenta.ru/news/2007/05/07/arctic/ (2006 year) Back
[5] Newspaper «Gazeta», 03.04.2007, Galina Antonova Back
