Min: Russian firms to raise geological exploration invest 15% ‘17

MOSCOW, May 31 (PRIME) -- Russian companies are expected to raise investments in geological exploration by 15% in 2017, Natural Resources and Environment Minister Sergei Donskoi told PRIME in an interview released Wednesday.

“We estimate it (growth of investments) at approximately 15% compared with last year,” he said.

“The new prolongation of the agreement (by OPEC and non-OPEC states) will lead to growth of investments in geological exploration, as it will create conditions for raising the annual average price to over U.S. $50 per barrel from $44 last year,” he said. “That’s why in 2017, under our estimates and estimates of international experts, growth of investments in upstream is expected in the world. Experts see growth of around 3%,” he added.

Donskoi said he will meet with oil producing companies in the second half of July to discuss their geological exploration plans in connection with the oil cuts extension.

In 2016, investments in geological exploration of hydrocarbons stood at around 275 billion rubles, he said.

In 2017, the companies will focus on geological exploration in Siberia and the Far East, he added.

“As far as companies’ investments in oil production are concerned, they grew 12% in 2016 – the volume of investments in production stood at around 1.2 trillion rubles, and they are expected around this level in 2017,” Donskoi said.

Earlier in May, OPEC and non-OPEC states agreed to prolong the oil production cut agreement for nine months, until April 1, 2018.

The ministry also expects that exploration drilling volumes of Russian companies will decrease 17% in 2017 after growth during past three years, Donskoi said.

Oil major Lukoil is expected to open a large field with recoverable resources of up to 100 million tonnes at the Vostochno-Taimyrsky block, Donskoi also said.

The Federal Mineral Resources Agency plans to hold an auction for the block comprising the Verkhnetiuteiskoye and Zapadno-Seyakhinskoye fields on the Yamal Peninsula with C1 gas reserves of 206.4 billion cubic meters in 2017.

(56.5168 rubles – U.S. $1)

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