In Russia, oil wells can stop

The reason is new environmental standards, which come into force on January 1.
The Russian Union of Industrialists and Entrepreneurs (RSPP) warned that the work of oil wells in Russia could stop, and the extraction of raw materials would decrease due to new environmental requirements, which come into effect on January 1, 2018. The president of the organization Alexander Shokhin wrote to the presidential aide Russia Andrei Belousov on December 14 (Vedomosti got acquainted with the text of the letter, its content was confirmed by a source close to the RUIE).

Oilmen will not be able to put into operation 500-1000 wells, the construction of which was started in 2017, in 2018, about 4000 wells will be stopped (almost 3% of the operating ones - Vedomosti), which will result in production losses of 20-30 million tons of oil per year and federal budget revenues of 250-400 billion rubles. And this does not take into account the loss of contract organizations, the letter says. In 2016, oil production in Russia amounted to 547.5 million tons, that is, a decrease of 3.7-5.5%.

Shokhin is referring to the new requirements of the law on environmental protection. Since the new year, companies are required to establish systems for measuring and recording emissions of pollutants into the atmosphere. The requirement refers to stationary sources located at category I facilities in terms of the level of environmental impact (these are refineries, facilities associated with the extraction of crude oil, natural gas, production of metals, mineral fertilizers, etc.). As early as autumn of 2016, the leaders of Rosneft, Lukoil, Surgutneftegaz, Gazprom Neft, Tatneft and RFPI asked the government to postpone the commissioning of these devices in 2023. President Vladimir Putin then instructed to clarify the procedure for the examination and equipping of facilities devices of the account of emissions. As a result, the State Duma amended the law on environmental impact assessment, they have already been adopted in the first reading and are supported by business. The amendments provide for the reduction of the examination period, transitional provisions for Category I facilities, the design and construction of which began before January 1, 2018, and the provision of permits for enterprises to develop and implement programs for equipping emissions control facilities for four years, Shokhin writes. According to the information of the Russian Union of Industrialists and Entrepreneurs, consideration of the bill is not planned before the end of the year. However, amendments will be considered on the transfer to January 1, 2019 of the requirement to equip pollution facilities with emission accounting facilities. In one year the companies will not be able to do this, therefore the problem is not solved, it is stated in the letter. In addition, there are still risks of attracting owners of Category I facilities to the responsibility of law enforcement agencies.

If the amendments to the state expertise are not adopted, this will not allow the completion in 2018 of the objects, the construction of which began in 2017, and will stop investment projects for at least half a year, because it will be necessary to obtain expertise. And given the increased number of examinations, the real terms of the delay will be greater, Shokhin points out. He asks Belousov to assist in resolving the issue. Get comments Belousov failed.

The letter was initiated by oil companies, says a source close to the RUIE. Representatives of Rosneft, Gazprom Neft, Lukoil, RSPP did not respond to requests.

The well stock in Russia has been growing in recent years. Their number will continue to increase, despite the limitation on oil production as part of the deal with OPEC, says Raiffeisenbank analyst Andrei Polishchuk. The company plans to increase drilling in new fields. Acting water cuts are growing, which requires more well input, he notes.