environmental challenges and movements surrounding unconventional development, Russia has used hydraulic fracturing (fracking) for many years for the extraction of conventional oil reserves. While fracking, in general terms, is occasionally referred to in Russian industrial safety and labor safety regulations, no legal definition or specific requirements are currently established by Russian law in this respect.
As far as we are aware, to date there have not been any legislative initiatives with respect to establishment of special regulations for fracking in Russia. However, if unconventional development becomes more wide-spread in Russia, we would anticipate that the debate around the need to regulate fracking operations would be had in Russia as it has been elsewhere in the world.
However, before fracking operations of the magnitude of a large unconventional development can become widespread in Russia, the industry will need to resolve the question as to where the companies will be able to resource the equipment from. There are a number of international and Russian oilfield service companies active in Russia; however, the current equipment inventory in Russia is unlikely to meet the demand of a large unconventional development (let alone the possibility of more than one unconventional development).
With these needs in mind, due to the planned development of the Arctic and Russia’s unconventional resources on the horizon, the Russian government has initiated the development of legislation to establish greater domestic equipment manufacturing capacity and ensure growth in the oilfield sector. However, this legislation is still in relatively early stages of development and short-term needs will likely need to be sourced from equipment manufactured outside of Russia.
Will Russia’s Unconventionals Сome Оut of the Fog?
Although implementation of Russian legislation governing unconventional resource development still has a way to go, this initiative is regarded by many as evidence of a new trend in state policy encouraging the development of unconventional reserves. That being said, Russia’s primary focus has been on tight oil reserves and there has been no visible legislative developments with respect to the potential development of Russian shale gas reserves.