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16-18 June 2020 • Moscow • Crocus Expo

How are Russian majors facing the Caspian Sea?

The Caspian Sea. The world’s largest in-land sea is brimming with potential. As much as 48bn barrels of oil and 9 trillion cubic metres of gas lies beneath its waves. As you can imagine, Russian majors are keen to get at this mineral treasure trove.
How are Russian majors facing the Caspian Sea?
The Caspian Sea itself is an interesting case. Bordered by five states, all of which are major energy players, its resources are divided amongst hungry partners. Of course, it’s also a huge body of water, which means pretty much all activity there takes place offshore. That creates some interesting equipment requirements.

Russia & the Caspian Sea: an oil & gas saga

Russia has a long history in oil & gas E&P in the Caspian Sea.

After the fall of the Soviet Union, which controlled four of the five countries which border the Caspian, a territory tussle began. With four new sovereign states, Russia, Azerbaijan, Kazakhstan, and Turkmenistan, plus Iran, all holding Caspian territory, awarding licenses and dividing territories has been a bit complicated.
After 25 years of negotiation and re-negotiation, a breakthrough was reached in August 2018. A fresh agreement between all five Caspian countries was reached. New boundaries have been drawn, making unofficial territory splits official. That includes sub-sea acreages too.
Instead of lines passing through oil fields, re-drawn boundaries now circumnavigate each. Essentially, each territory gets access to the entire field in its territories. If a country loses part of a field, then it is compensated with a proportional role on that field’s development.
That isn’t to say that Russia wasn’t already developing oil & gas fields in the Caspian before this agreement was inked. After all it’s been over two and a half decades since the Soviet Union dissolved, but the new deal means it should be smooth sailing in the Caspian from here on out.

Lukoil leads Russian Caspian oil & gas activity

Lukoil is Russia's Caspian oil & gas pioneer.

Lukoil has waded through years of tensions upon the Caspian to develop a number of significant fields. The oil producer discovered Russia’s first Caspian oil in 2000, 170km offshore from Astrakhan on Russia’s Southeast coast.
Since then, Lukoil’s Caspian acreage has expanded significantly. As many as 10 field discoveries can be attributed to Lukoil’s pioneering efforts. Combined recoverable resources, Lukoil claims, fall into the region of 1bn tons of reference fuel.
Fields under Lukoil’s full control are:
Filanovsky is exceptionally notable. It’s currently the largest field in the Russian Caspian, initially holding recoverable reserves of 129m tons of oil and 30bn cubic metres of gas. Commercial production kicked off in 2016, and by 2018 Filanovksy’s 6-million-ton annual production plateau had been reached. Further work on a 3rd Filanovsky well is due to begin in 2019.
Rakushechnoye is Lukoil’s current major regional development project. First discovered in 2001, the field has endured a fairly long gestation. In 2018, however, initial building work first started on an ice-resistant drilling platform and sub-sea transmission cables at the site, connecting it to the nearby Filanovsky field’s existing infrastructure. Commercial oil is expected to be acceptable by 2023.
Overall, Lukoil has produced 20m tons of oil from its Caspian fields.

Tie-in & joint-ventures power Caspian development

Lots of oil & gas projects in the Caspian are joint ventures or tie ins.

With five hydrocarbons producing nations surrounding its bountiful waters, it’s only natural that the Caspian is a home of joint ventures and tie-ins of all shapes and sizes. 
Rosneft, for instance, which has previously developed and explored the Northern Caspian, has recently bought seismic data in Azeri waters for a cool $1.1m. Far from trespassing in Azerbaijan’s territory, it’s ready to begin a joint study of the area alongside Azeri NOC SOCAR.
Gazprom is never far from any hub of hydrocarbons activity. The Caspian Sea is no different. Together with Kazakhstan’s national gas producer, KazMunayGas, Gazprom is developing the Tsentralnoye and Imashevskoye Fields.
Together, both fields represent hundreds of millions of tons of fuel, with high oil estimates at 316m. Gas reserves exceed 100bn cubic metres. 
Significant fields, then, and two that suggest a harmonious oil & gas future is coming to the Caspian.
The ever-present Lukoil has its own deal with KazMunayGas. Signed in December 2018, the agreement covers development of Kazakhstan’s Zhenis block. As it stands, Lukoil has plenty of fingers in the Kazakh pie, involved in E&P at Tengiz, Karachaganak and Kumol fields.

Offshore technology required in the Caspian Sea by oil & gas majors

It goes without question that offshore technologies are in the highest demand amongst Russia’s Caspian Sea developers. This is good news for some, as Russia is reliant on imported oil & gas equipment to complete its projects.
According to research from Global Risk Insights, the share of imported offshore and sub-sea technologies in use in Russia right now is as high as 80%.
Higher-tech solutions are very much desired throughout the Caspian. Drilling conditions across the region are notoriously difficult. At Filanovsky, for example, bilateral horizontal wells have been equipped with intelligent inflow management systems.
It’s these types of technology that are required throughout the Caspian – but you don’t have to travel there to meet the buyers looking for it. They’ll be in Russia’s capital at MIOGE.

MIOGE 2019: Russia’s no.1 international oil & gas equipment exhibition 

The Moscow International Oil & Gas Exhibition is the meeting place for the international community and Russia’s oil & gas industry. Over 560 companies trust the show to let them meet and do business with representatives from across the value chain.
Here, you’ll meet the players behind the Russian oil & gas projects listed above, as well as getting details on Russia’s project landscape from to 2025 and beyond. 
Find procurement, engineering and purchasing specialists exclusively at MIOGE. 
Russian majors, including Gazprom, Tatneft, Rosneft and Lukoil, attend the show every year. Why? To meet new partners and suppliers of in-demand oil & gas equipment and technology.
To reserve a stand, click here.  
Want more information on how MIOGE can help grow your business in Russia’s enormous oil & gas industry? Contact our team today.