Measurement and Testing
How Strong is Russian Oil?
Jun 11 2018 Read 452 Times
Churning out an estimated 11 million bpd, Russia cradles one of the biggest oil industries on the planet. Now, the nation is flexing its muscles and proving its oil industry is more resilient than analysts may think. Despite sanctions imposed by both the US and Europe, companies like TMK are running at full capacity. The group is Russia’s largest manufacturer of steel pipes and is set to play a key role in pushing forward the nation's bullish industry.
“For seamless pipes we are working at full capacity. In terms of metres, we are at full charge,” asserts Sergey Chetverikov, the plant’s CEO. “There is a huge demand for thin-walled pipes, casing pipes for wells, for the oil and gas industry.”
Dwindling Russian rouble elevates national revenue
So what's fuelling Russia's booming oil industry. There are several factors at play, including a recent surge in oil prices prompted by an embargo put in place by Russia and the OPEC member states. It slashed crude output by 1.8 million barrels a day which helped to increase demand and lift prices back up from lows of under US$30 a barrel. Simultaneously, the value of the Russian rouble has dropped which has increased revenue for local oil producers. The market has also been spurred by initial successes in the Arctic, a region that's remained largely untapped until now.
The figures speak for themselves, with Russian oil and gas companies clearly reaping the benefits. Rosneft, Russia's largest petroleum refining company, recently reported an enormous seven-fold spike in first-quarter net profits. Similarly, Moscow-based multinational energy corporation Lukoil saw a year-on-year increase of 75%. Gas companies are also cashing in, with Gazprom, Russia's leading natural gas extractor reporting an 11% increase in profits. Investors have been quick to respond, with the Moscow stock exchange’s oil and gas index hitting a record high in May.
Full steam ahead for Russian producers
Chetverikov is confident the market will continue to perform, asserting that there's exceptionally high demand for drilling pipes, as well as technically complex products. “We have long-term investment plans for new capacity, and for research and development,” he says.
As Russia's energy industry gains momentum, producers will be looking at new ways to boost efficiency and maximise profits. Highlighting the issue of refinery corrosion, '4 ways to effectively monitor total chlorine in liquid hydrocarbons' introduces the latest Clora® Benchtop Analyser technology from XOS, a global leader in application-specific XRF analysers.
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