By OGJ editors
HOUSTON, Mar. 20 -- Expenditures for drilling, seismic surveying, and workover programs in Russia amounted to $11.4 billion in 2006 and is forecast to rise to $22.5 billion by 2011, according to a recent study from energy analyst Douglas-Westwood Ltd.
Just in Eastern Siberia, the growth in expenditures is set to soar at a 43% compound annual growth rate over the next 5 years, according to the study, entitled "Russian Oil Field Services Market Report 2007-11." The report is based on data collated from interviews with key industry entities, including Russian oil companies and indigenous and foreign oil field service contractors.
The report further suggests, however, that the main volume of activity will continue to occur in Western Siberia.
"Western Siberia currently accounts for 70% of overall expenditure, but with significant growth in other areas, this will fall to 51% by 2011," said analyst Rod Westwood.
Attributing to this particular region's expenditure outlook is an increased focus on reservoir management and enhanced oil recovery, both in terms of oil field services and major equipment items such as rigs and electrical submersible pumps (ESPs), Westwood said.
"Russia is the world's largest ESP market and our research shows that over 70,000 units are currently active. Many of the country's aging rigs, which have suffered from years of underinvestment, are also due to be replaced, leading to major projected growth in newbuild rig expenditure," he said.
Douglas-Westwood Director Andrew Reid said, "The oil field services industry within Russia has evolved rapidly in recent years, driven by the liberalization of the market and a move to western business models as E&P players have moved to outsource their servicing to specialist contractors in an attempt to further improve their operational efficiency."
The report confirms that Russian E&P companies have been divesting their inhouse oil service capability through disposals, enabling access by third-party providers, and allowing E&P companies to focus on reserves growth and production.
