Hard-to-recover Bazhen hydrocarbon production three times more cost effective since 2017 - Russian Dep PM Novak

MOSCOW. Jan 30 (Interfax) - Developing the hard-to-recover Bazhen hydrocarbon reserves has become three times more cost effective in the last seven years.

"The federal project 'Technologies for the Development of Hard-to-Recover Hydrocarbons' was successfully completed in 2024. Its goal was to create cost-effective technologies for the exploration and production of unconventional hydrocarbon reserves. The project was carried out in the Khanty-Mansiysk Autonomous District for the development of the Bazhenov Formation. During the project's implementation, the cost-effectiveness of hard-to-recover hydrocarbon production has tripled (development costs decreased to 8,500 rubles per tonne in 2024 from 30,000 rubles per tonne in 2017)," Deputy Prime Minister Alexander Novak said in his column for the Energy Policy journal.

As part of the project, a test ground was launched to develop technologies for the geological study, exploration and production of hard-to-recover reserves. More than 50 high-tech wells were built there to test the best methods for the development of the Bazhenov Formation and more than 1,000 high-volume frac jobs were carried out.

"Thanks to the work carried out at the test ground, a whole range of technologies was imported, many with broad potential for adaptation and application to other hard-to-recover reserves, including the Achimov and Tyumen formations," Novak said.

He also said that since last year, developers of viscous and extra-viscous oil reserves had been eligible for the excess profit tax regime if such oil makes up at least 70% of the annual volume. "Transferring such deposits to EPT will ensure the investment appeal and profitability of development and bring new resources into circulation, increasing budget revenues and preserving jobs in the regions," Novak said.