Russia is increasing its oil drilling more than ever since the times of the Soviet Union. Getty Images / SERGEI GUNEYEV, JacobH ; Collage: Dominik Schmitt
Russia increased the scale of its oil drilling last year to the highest level since the end of the Soviet Union.
Drilling has expanded even as Western oil companies withdrew from Russia after the invasion of Ukraine.
The efforts show how important oil revenue is for Russia – and how hard the country has to fight for its production.
Russia probably set a record new oil drilling in 2023 for the second year in a row. This shows how important Russia attaches to the oil business for the future. The increase in oil drilling was achieved even though Western oil companies have withdrawn money and experts from joint projects in Russia and Western states are maintaining their sanctions against Russia because of the attack on Ukraine.
In the first eleven months of last year, Russia drilled a total of 28,100 kilometers and is expected to exceed 30,000 kilometers for the entire year, writes Bloomberg, citing figures from Kpler and Yakov & Partners.
Russia is expected to surpass the previous drilling record from the period after the end of the Soviet Union in 2022, according to the report. The number of exploration drillings in Russia has risen to the highest level since the corona pandemic.
Russia has relied heavily on its energy sector since President Vladimir Putin ordered the attack on Ukraine in February 2022. Oil exports traditionally make an important contribution to both gross domestic product and the Russian state budget. Since the start of the war, these revenues have become even more important to meet the high costs of the attack on Ukraine.
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Western countries are no longer buying any or less oil from Russia. The G-7 countries and Australia are also trying to enforce a maximum price of $60 per barrel of oil for Russian oil for other buyers. After Russia’s attack on Ukraine, important Western oil companies and service providers withdrew from the country.
Russia was able to increase its oil exports despite the sanctions. This is mainly because China and India have stepped in as buyers. However, Russia’s revenues and especially profits from the oil business have fallen. China and India only buy Russia’s oil at discounts. Circumventing the sanctions and the price limit with its own fleet of tankers is also very expensive for Russia.
The current record drilling does not necessarily mean a production boom. Russian oil companies are working to maintain production from their oldest wells. In December, Russian crude oil production averaged 9.57 million barrels per day, almost 60,000 barrels per day lower than the previous month.
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