ST PETERSBURG (Reuters) - Russia’s Gazprom Neft expects lifting costs at Bazhenov formation, the world’s largest shale oil resource, to gradually fall and reach an acceptable level for viable production by 2022-2023, a top company official said on Thursday.
Russia sits on huge reserves of shale oil, which needs more investments for developments than the conventional oil. Unlike the United States, it lacks technology and funds to produce shale oil in large volumes.
The break-even lifting costs for shale oil production at the formation stand at 8,500 rubles ($132) per tonne, Alexei Vashkevich, head of geological exploration and resource base development at Gazprom Neft, told reporters.
“We are ready to get that number in 2022-2023,” he said in comments, cleared for publication on Monday.
He said the company had been working to raise its effectiveness, including via implementation of state-of-the-art technologies.
The company plans to start commercial production of oil from Bazhenov formation in 2025, Vashkevich reiterated.
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.
Gazprom Neft estimates that the reserves of the light, low-sulphur and of low-viscosity Bazhenov formation stand at between 18 billion and 60 billion tonnes.
Reporting by Vladimir Soldatkin; Editing by Subhranshu Sahu