KHANTY-MANSIISK, Russia, March 1 (Reuters) - Russia’s Gazprom Neft expects to start commercial production from Bazhenov formation, the world’s largest shale oil resource, in 2025 provided it can reduce lifting costs from current estimates for the project, company officials said.
The International Energy Agency describes Bazhenov as the world’s largest source rock, a bed of ancient organic matter dating back to the Jurassic period which has given rise to most of the crude oil pumped from the fields of West Siberia.
Production of such oil is more costly than the extraction of the oil from conventional reservoirs.
“We understand that this is a very serious technological challenge,” Alexei Vashkevich, head of geological exploration and resource base development at Gazprom Neft, told reporters.
For the project to be viable, lifting costs needed to fall to 8,500 roubles ($151) per tonne, Vashkevich said, without disclosing current estimates.
Kirill Strizhnev, who oversees the Bazhenov project for Gazprom Neft, said commercial production might start in 2025.
Gazprom Neft, which estimates that it can potentially extract 400 million tonnes of oil equivalent (8 million barrels per day) from Bazhenov, currently produces 150 tonnes per day from the formation.
The company initially planned to tap Bazhenov jointly with Shell but the international major withdrew from the project in 2014 following international sanctions against Russia for its role in Ukrainian crisis.
$1 = 56.2600 roubles Reporting by Oksana Kobzeva Writing by Vladimir Soldatkin Editing by Edmund Blair