RusEnergy

25.03.2005 16:45 MSK MosNews - Russian oil companies once again failed to achieve full oil reserve replacement in 2004, with newly discovered deposits representing only 72 percent of the total output, Sergei Fyodorov, an official with the Russian Natural Resources Ministry said on Friday, March 25. Fyodorov said that Russia added only 330 million tons (2.4 billion barrels) in new reserves against 2004 output of 458 million tons. He also said that between 1999 and 2003 reserve replacement ran at 85 percent of output. Russian oil output has risen by more than 50 percent since 1999 to over 9.3 million barrels per day and represented the bulk of new oil coming from outside the oil cartel OPEC. Growth has slowed in the past months due to several factors such as the Kremlin's dismemberment of oil major Yukos, export bottlenecks, higher taxes and the lack of new easily recoverable reserves. Analysts say future growth depends on how the country taps new deposits outside its key producing region in West Siberia in places such as East Siberia, the Arctic shelf, Sakhalin Island, the northern Timan Pechora region and the Caspian Sea. Russia has the world's seventh largest oil reserves of 69 billion barrels, according to BP's statistical review, but many analysts believe they may become much larger after more exploration. Some analysts, quoted by Reuters, say with the addition of reserves in new provinces Russia could outpace Iran, which has the world's second largest reserves of 131 billion barrels, and beat all but Saudi Arabia with its unmatched 263 billion barrels. Russian exploration should increase if parliament passes a new law this year on subsoil use, which would give firms that strike oil the right to develop the deposit, adding a major incentive to invest in exploration. Under the current law, the state can re-offer the deposit at a production rights auction even if the exploration license holder invested millions of dollars in the field.