November 15, 2010
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№ 10 (October 2010)

SPE RO&G 2010 Kicks Off In Russia With Record Crowd

SPE Russian Oil and Gas Exploration and Production Technical Conference and Exhibition kicked off for the third time Tuesday, with over 4,000 industry professionals expected to attend and 75 exhibitors displaying the latest technology achievements.

By Bojan Šoć

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“The main theme of the conference is new horizons and primarily those in developing new oil and gas regions, particularly Arctic,” Rosneft Science director and SPE Program Committee co-chairman Mars Khasanov said in his welcoming address as he opened the conference’s plenary session.

Khasanov then handed the floor to Russia’s Reserves State Commission deputy head (GKZ) Yevgeny Areshev who labeled the event “unique and unrivaled in Russia.”
According to Areshev, GKZ and SPE have forged close ties in recent years and signed a cooperation memorandum last November to cap that partnership.

“As part of that agreement, we have been doing the mapping work since March 2010, comparing Russia’s reserves classification with SPE’s PRMS (Petroleum Resource Management System – Show Daily) – the system of management of liquid, gaseous and hard hydrocarbons. The results of this work would be jointly evaluated later,” said Areshev.

He added that GKZ officials had met three times over the last year with SPE’s senior management. The cooperation is expected to be depeened further in March 2011 when GKZ and SPE’s Reserves Committee plan to hold a conference with a focus on bringing closer the two reserves evaluation systems and defining principles of standards harmonization.

“SPE possesses colossal potential, and it would be a pity to waste it. Russia’s oil industry has emerged from the crisis with minimal losses and despite general tendencies even managed to slightly grow its oil output, which is expected to top the 500-million-ton mark by the end of the year,” said Gennady Shmal, president of Russia’s Union of Oil and Gas Producers.

The industry veteran lamented the decline in Russia’s gas industry, which saw its production in 2009 drop by nearly 75 billion cubic meters of gas.

Russia’s other major concern, Shmal added, was the industry’s plummeting oil recovery factor, which had fallen from 0.45 in 1975 to 0.29 today.

“Meanwhile, the oil companies working in the United States have increased the oil recovery factor and with SPE’s assistance we could have a closer look at our U.S. colleagues’ experience and apply it at home,” Shmal said.

According to him, the major problem hurting Russia’s oil industry is the lack of sufficient investments in upstream. “Global investments in 2010 reached $418 billion, or $100 per ton of oil whereas in Russia that figure barely tops $35 per ton, meaning our capital expenditure in production and exploration should be more than doubled,” Shmal concluded.

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