Ministry of Energy: Cost of Production of Russian Oil Is $2 per Barrel

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March 23, 2016

Nakanune

Translated by Kristina Kharlova

According to the Deputy Minister of Energy of Russia Kirill Molodtsov, “the average production cost of a barrel of Russian oil is about $2. The cost of producing hard-to-recover and offshore reserves is above $20. The rates also vary significantly depending on the cycle of mineral development. With declining production, the cost is higher, since at the same cost level less oil is extracted,” – said the official.

Earlier the president of “Rosneft” Igor Sechin said that because of financial speculators oil prices could fall to $10 per barrel. According to him, the annual decline in average daily production in the world is estimated at 3 million barrels a day. Meanwhile, according to Sechin, the excess of supply of oil over demand is between 1.5 and 1.7 million barrels a day, according to RBC.

Saudi Arabia is ready to sign an agreement on limiting oil production, even if Iran does not.

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In comparison:

PlaceCost of production in northern hemisphere autumn 2014
Saudi ArabiaUS$10–25 per barrel
Montney Oil Alberta and British ColumbiaUS$46
Saskatchewan BakkenUS$47
Eagle Ford, USA Shale+US$40–50 (+ Liquids-rich Eagle Ford plays, assuming natural gas prices of US$3.80 per mmbtu)
Lloyd & Seal Conventional Heavy, ABUS$50
Conventional Light, Alberta and SaskatchewanUS$58.50
Nebraska USA ShaleUS$58.50
SAGD Bitumen AlbertaUS$65
North Dakota Bakken, ShaleUS$54–79
Permian Basin, TX ShaleUS$59–82
Oil sands legacy projectsUS$53
Oil sands mining and infrastructure new projectsUS$90
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