Development of Hard–to–Recover Reserves

The Company makes consistent efforts in bringing hard-to-recover oil reserves into active development. Production of hard-to-recover reserves subsidized by the Government in accordance with applicable lawsAccording to Federal Law No. 213-FZ dated 23 July 2013. increased to 16.3 mmt in 2017, more than doubling the 2014 level. In 2017, over 900 wells were drilled for hard-to-recover reserves.

16.3 mmt oil production from hard-to-recover reserves in 2017
0.55 bln tonnes Rosneft’s high-viscosity oil reserves

Today the Company’s portfolio of assets with hard-to-recover reserves consists of more than 140 fields holding a total of over 2.5 bln tonnes of oil in recoverable reserves (АВ1С1+В2С2).

2.5 bln tonnes of oil total hard-to-recover reserves

The Company’s largest hard-to-recover reserves asset is RN-Yuganskneftegaz, with over 1 bln tonnes of hard-to-recover reserves. A significant amount of hard-to-recover reserves is also recorded on the books of RN-Nyaganneftegaz, Verkhnechonskneftegaz, and RN-Uvatneftegaz. These enterprises and RN-Yuganskneftegaz currently account for approximately 90% of the Company’s resource base of hard-to-recover reserves.

The Company’s recoverable reserves of high-viscosity oilA viscosity of more than 200 mPa according to Federal Law No. 151-FZ dated 27 July 2006. within the Russian Federation total more than 550 mmt, primarily concentrated in the Russkoye field, unique for its size, and where the drilling program was further implemented in 2017: 83 horizontal wells were drilled, including eight multilateral horizontal wells.

In 2017, the Company’s portfolio of assets with hard-to-recover reserves was expanded through the formation of the Erginsky cluster that comprises the Kondinskoe group of fields, where hard-to-recover reserves exceed 150 mmt and the Erginsky License Area, the reserves of which amount to103 mmt.

The expansion of the Company’s resource base of hard-to-recover reserves in 2017 was also made possible through implementing an extensive exploration program on formations containing hard-to-recover reserves, which has enabled the Company to define formations with low-permeability reservoirs and additionally increase the estimated volume of the Company’s hard-to-recover reserves by over 170 mmt. These efforts will allow the Company to meet the Minerals Extraction Tax (MET) credit conditions for hard-to-recover reserves, thereby providing an extra incentive to step up development of these projects.

The bulk of subsidized production from hard-to-recover and high-viscosity reserves is concentrated in Western Siberian fields which contain low-permeability formations of the Tyumen suite, the Achimov deposits, and formations containing high-viscosity oil. The post-2022 forecast of hard-to-recover reserves development strongly depends on alleviating geological and technological uncertainties, for which the Company actively seeks optimal technical and economic solutions. The Company considers possibilities of further expanding its hard-to-recover resource base through unlocking the full potential of high-viscosity reserves, as well as unconventional oil reserves from the Bazhenov, Abalak, Khadum, and Domanik suites. Achieving additional potential is possible through successful pilot development in joint-project frameworks in collaboration with global partners.

Apart from joint projects to identify, test, and deploy technologies for hard-to-recover reserves development, the Company has its own program of exploration and pilot projects aimed at developing low-permeability formations, high-viscosity oil deposits, and the Bazhenov suite within the framework of target innovative projects. The program includes development of the following technologies:

  • developing silty sand deposits (ultra-low permeability, high heterogeneity) with a geologically adaptive development system and enhanced completion technologies
  • bringing Bazhenov suite deposits into production based on specific core research, localization of prospects for drilling, and completion technologies
  • thermal recovery methods for ultra-high-viscosity oil fields in the Samara Region
  • developing the high-viscosity oil reserves contained within palynological complex formations in Western Siberia, the technology for which may also be applicable in developing the Russkoye and North Komsomolskoye fields, as well as the Messoyakhskoye project fields.
2017 RESULTS

In 2017, exploration and development projects on hard-to-recover reserves delivered further positive results.

The Company continued implementing its innovative project to improve exploration technologies and modelling of low-permeability formations at RN-Yuganskneftegaz fields. Pilot projects to re-orient hydraulic fractures were conducted – mechanical geological models were built and three horizontal wells were drilled with multi-stage hydraulic fracturing and transversal pointing of fractures relative to the well.

Constructing wells with an increased length of horizontal sections is currently being carried out, and horizontal wells with a horizontal section length of up to 2 thousand m have been drilled and developed through 10-stage hydraulic fracturing.

The Company continues pilot development of producing deposits of the Bazhenov suite. In 2017, eight directional and four horizontal wells were drilled in RN-Yuganskneftegaz fields, standard hydraulic fracturing was also carried out, as well as hydraulic fracturing with a high rate of fluid flow and low-viscosity fluids. In 2018, multi-stage hydraulic fracturing at the Bazhenov suite will be continued.

Drilling rig at a Vankor cluster field Drilling rig at a Vankor cluster field