Reaching a natural end

Natural energy reserves worldwide are being extracted at a rate which means they'll soon run out. Consequently, what remains is harder to source, so highly advanced methods - including robotic technology - is employed. This has a huge impact on the cost of the final product.

How do things currently stand in Russia?

No one knows the exact amount of national resources Russia started with, or indeed, how much it has left. The Russian government, quite understandably, has been reticent in disclosing this information.

The most credible figures so far are those provided by British oil company BP, which places Russia first in the world in terms of proven gas reserves (28pc of the world's reserves or 48 trillion cubic metres) and seventh for oil reserves (6.1pc or 72 million barrels). As a comparison, Saudi Arabia is estimated to hold 22pc of the world's reserves.

Approximations of how long this volume can last are fairly gloomy.

Yevgeni Kozlovsky, a former Soviet minister of geology, puts oil reserves at 50 years and gas reserves at 75 years.

Vladimir Milov, president of influential think-tank Energy Policy Institute, thinks similarly: according to his view Russia's gas will last 80 years and oil just 40 years on current trends. Milov, however, believes that both figures can be doubled if geological avenues are properly explored.

But industry insiders feel there are still plenty of ways Russia can develop its energy industries, even if exploiting them may pose considerable problems. Vladimir Shelkov, director of Norilskgazprom, a major gas company in northern Russia, thinks that the known resources of Taimyr peninsula (north of the Arctic Circle) could last 80 years.

"Practically all of the easily accessible deposits are already under development, but the fields located in Yamal, Taimyr and generally those that are north of the Arctic Circle provide an option for the country's gas producing industry," he said.

Shelkov emphasised the importance of keeping one eye on the future, but given the present conditions, the Arctic Circle development remains largely unrealistic. The reasons for this include severe climatic conditions, labour shortages, the immense logistical challenges, and the need to build new pipelines to transport gas to the mainland.


Additional reading material

IGOR TYUKHOV Professor at the All-Russian Research Institute for Electrification of Agriculture "SEEKING ALTERNATIVES"
Russia Profile/business, November 30, 2007
www.russiaprofile.org

VLADIMIR MILOV President of the Energy Policy Institute
"RUSSIA-EU ENERGY DIALOGUE: FILLING A VACUUM"
Russia in Global Affairs, № 4, October-December 2007
eng.globalaffairs.ru

GROUP OF AUTHORS
"THE EVOLUTION OF THE GLOBAL ENERGY MARKET"
Russia in Global Affairs, № 1, January-March 2007
eng.globalaffairs.ru

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