Economy: Ministry of Energy: Cost of Production of Russian Oil Is $2 per Barrel

Wednesday, 23 March, 2016 - 13:00

Translated by Kristina Kharlova

According to the Deputy Minister of Energy of Russia Kirill Molodtsov, "the average production cost of a barrel of Russian oil is about $2. The cost of producing hard-to-recover and offshore reserves is above $20. The rates also vary significantly depending on the cycle of mineral development. With declining production, the cost is higher, since at the same cost level less oil is extracted," - said the official.

Earlier the president of "Rosneft" Igor Sechin said that because of financial speculators oil prices could fall to $10 per barrel. According to him, the annual decline in average daily production in the world is estimated at 3 million barrels a day. Meanwhile, according to Sechin, the excess of supply of oil over demand is between 1.5 and 1.7 million barrels a day, according to RBC.

Saudi Arabia is ready to sign an agreement on limiting oil production, even if Iran does not.

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In comparison:

Place	Cost of production in northern hemisphere autumn 2014
Saudi Arabia	US$10–25 per barrel
Montney Oil Alberta and British Columbia	US$46
Saskatchewan Bakken	US$47
Eagle Ford, USA Shale+	US$40–50 (+ Liquids-rich Eagle Ford plays, assuming natural gas prices of US$3.80 per mmbtu)
Lloyd & Seal Conventional Heavy, AB	US$50
Conventional Light, Alberta and Saskatchewan	US$58.50
Nebraska USA Shale	US$58.50
SAGD Bitumen Alberta	US$65
North Dakota Bakken, Shale	US$54–79
Permian Basin, TX Shale	US$59–82
Oil sands legacy projects	US$53
Oil sands mining and infrastructure new projects	US$90