Russia needs to lighten regulation to exploit unconventional oil deposits, including shale, its natural resources minister said, as conventional resources dwindle and Western sanctions limit access to foreign technologies and financing.
The world's top oil producer, believed to hold most of the world's shale oil, extracts less than a million tons a year from unconventional sources, including heavy, tight and shale, Reuters reported.
"Russia is facing serious challenges. It is essential to clearly understand which sources will allow sustaining a mineral resources production level essential for the country's economic development," said the minister of natural resources and environment, Sergei Donskoi. Tapping shale oil has become increasingly unprofitable in Russia as oil prices have plunged by a quarter since June to just above $80 per barrel. Last year, Russia introduced some tax breaks to boost shale oil production.
Donskoi suggested skipping tenders for unconventional oil exploitation, and offering rights to develop such deposits based only on a request from a firm, with a bias towards smaller companies. Those firms should be obliged to start exploration no later than 4-5 years after the offer was accepted, with a possibility that the field would be transferred to another company if the firm failed to find appropriate technology, he said.
Donskoi also suggested cancelling mineral extraction tax for unconventional oil, and guaranteeing access to refining facilities and funding, including from the National Wealth Fund.
