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Russian sovereignty in Arctic oil and gas: projects for replacing imported technologies

Domestic helicopters, drilling fluids and seismic exploration stations

6 may 2024

The Russian oil and gas sector is highly technological and science-intensive. Oil extraction today requires sophisticated equipment at every stage from locating reserves to transporting the final product to the base. Historically, Russian companies relied on ready-made foreign solutions which have become increasingly unavailable in recent years. Despite this, oil and gas extraction continues in the Arctic, indicating a domestic market for these technologies exists. The question remains as to how this is achieved.

In January 2024, Vedomosti released a summary based on a document produced by the Ministry of Industry and Trade, Ministry of Energy and Gazprom Neft. The Onshore Drilling and Production Equipment roadmap plans for investments totalling RUB 19.8 bn in domestic technology development by 2030. Oil and gas companies are poised to drive industry growth; currently operating with existing resources but eventually aiming to domestically produce essential industry components like drilling rigs and extraction chemicals. 

A total of 19 research and development activities and long-term equipment supply contracts are scheduled.

Oil companies are also expected to provide expert assistance to scientists and engineers. It is anticipated that domestic products will comprise 80% of Russia's oil and gas technology market within six years. As of 2022, Russia heavily depended on foreign solutions for oilfield services like rotary steerable systems and hydraulic fracturing devices—over half were imported. Technologies are essential for exploiting the challenging and abundant oil and gas fields available domestically. With the establishment of the AZRF and enhanced preferential policies in Russia's Arctic regions, there's an increased demand for technologies to harness these rich underground resources effectively.

In late January 2024, the Moscow Institute of Thermal Technology announced it would deliver the first serial hydraulic fracturing fleet model to a customer for year-long field testing. Additionally, a domestically developed system for drilling deviated wells—the RUS-GM-195 rotor-controlled system—comprises 90% local components and features hydromechanical systems over complex electronics for improved maintainability. In May this year in Kazan, specialists from Kazan Federal University's Institute of Geology and Petroleum Technologies developed a human-safe reagent intended for use in Arctic shelf oil and gas extraction. This agent prevents hydrate plug formation during oil "black gold" extraction and transport processes, safeguarding costly equipment from accidents.

In the Arctic, oil and gas operators face stricter requirements than elsewhere in Russia. Reagents from Kazan must not only function effectively but also endure extremely low temperatures while being highly reliable and safe. Developing oil and gas production on Russia's Arctic shelf necessitates building marine and coastal stations designed to preserve the fragile Polar ecosystem even in accidents.

Additionally, deliveries of the Mi-171AZ helicopter will soon commence to support Arctic exploration efforts. This variant of the Mi-8 helicopter is manufactured by Russian Helicopters at both Ulan-Ude Aviation Plant and Kazan Aircraft Building Plant. The Mi-171AZ can transport up to 24 polar explorers over a distance of 1,000 km, in temperature variations from –50°C to +50°C, equipped with all the necessary safety features mandated by the International Association of Oil and Gas Producers for over-sea flights. Today, the manufacturer has not only continued producing helicopters but has also launched a spare parts line and is finalising flight tests. Russian Helicopters has already secured contracts with PJSC Gazprom and Aurora Airlines. Rostec projects the offshore helicopter market in Russia to reach about 100 units annually by 2035.

Another key development in offshore oil and gas extraction is the introduction of the domestic CRAB platform—a mobile hardware and software complex for marine seismic exploration and monitoring in transit zones and on the shelf. It enables 3D seismic exploration, can be operational within 24 hours and is usable both at sea and on land.

Meanwhile, the Russian Arctic shelf contains 12.7 bn tons of hydrocarbons, with 9.3 bn tons currently inaccessible due to technical and economic constraints. This view is held by Boris Senin and Mikhail Leonchik of Yuzhmorgeologiya, as expressed in their article 'Half a Century of Marine Oil and Gas Exploration on Russian Shelves: Achievements, Problems and Solutions.' In the future, as the industry evolves, this significant figure could supply oil and gas companies with raw materials for a century or more.

Image attribution: Shutterstock

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