An average of $34.1bn per year in capital expenditure will be spent on 1,673 oil and gas fields in Russia between 2018 and 2020, according to GlobalData. Capital expenditure into Russian traditional oil projects will add to up $55bn over the three-year period, while heavy oil fields will require $7.1bn over the same period. Investments into gas projects in Russia will total $40.3bn in upstream capital expenditure by 2020.
Onshore projects will be responsible for over 85% of the $102.6bn of upstream capital expenditure in Russia, or $88bn by 2020. Russian shallow water projects will necessitate $14.6bn in capital expenditure over the period.
GlobalData expects that Gazprom, together with Gazprom Neft, will lead the country in capital expenditure, investing $37.5bn into upstream projects in Russia by 2020. Rosneft Oil Company and Lukoil Oil Company will follow with $30.9bn and $14.1bn invested into Russian projects over the period, respectively.
Source: GlobalData Upstream Analytics
Gazprom’s producing Bovanenkovskoye field will lead capital investment with $5bn spent between 2018 and 2020, followed by Gazprom’s planned Kovyktinskoye gas field with $4.3bn over three years in capital expenditure. Rosneft Oil Company’s producing Samotlorskoye field will require capital investment of $2.6bn by 2020.
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GlobalData pegs the average remaining capital expenditure per barrel of oil equivalent (capex/boe) for Russian projects at $6. Onshore gas projects have the lowest remaining capex/boe at $4.80, followed by onshore oil and onshore heavy oil developments with $6.80 and $7 respectively. Shallow water oil projects have the highest remaining capex/boe at $11.40, while shallow water gas projects need $8.70 per boe in remaining capital expenditure.