Igor Shpurov: the high petroleum price and the availability of perspective areas will enable to widen the scope of exploration
Tyumen. The geology in Russia today is on the verge of a new phase: the approach to reserves is drastically changing. Russia has become the first country, whose national classification of hydrocarbon (HC) reserves got recognized by the UN. Now is the time to summarize the results, and pay attention to the existing gaps, define the trends and the perspectives for further development. Igor Shpurov, the head of the State Reserves Committee, shares his views on the progress of exploration in Russia.
- Natural Reserves Ministry is planning to amend the Subsoil Law, so that it would provide for economic stimulation of exploration. Igor Victorovich, how is it going to influence the exploration policy?
- Any legislative measures of economic stimulation enable to improve the exploration policy. There is no doubt that this time they are also going to have a positive effect on the scope of explorational operations undertaken by companies. How much the scope is going to increase will be clear after the amendments go into force.
Two factors influence the scope of exploration. The first being the price for petroleum products, the second is the availability of perspective territories. The later, in its turn, depends on how active the state is in studying the subsoil on the regional level and determining the oil and gas bearing territories for further licensing. So, the exploration activity of the subsoil users largely depends on the efficiency of such work done by the state.
- What priorities/trends are going to prevail in terms of exploration during the next 5 years?
- Unless the scope of exploration at the state level is going to increase and without focusing on searching for new oil and gas bearing perspective territories, the reserves increment is going to decline slowly. On the other hand, licensing new areas, evaluated as perspective by the state, will enable companies to facilitate explorational activity and consequently to enhance the reserves increment for the areas.
- Igor Victorovich, shifting to the new hydrocarbon reserves classification is about to finish. You said earlier that we’d be able to speak about the results of the changes in March, when the reserves have been entered into the State Reserves Register. What are the results?
- The objectives, which the state counted on introducing the new classification, have proved to be reasonable. In particular, a new concept – reserves recoverable during the economic development period – appeared. Along with this we managed to define the reserves, whose development under the current economics and technology is inefficient. Which means the possibility and feasibility of their development should be questioned.
Secondly, we’ve managed to overcome a number of administrative obstacles. For instance, we included the Central Committee for HC fields Development into the State Reserves Committee. There is no need to prepare extra documents, such as the Feasibility Study of ORF. Development projects and technical documents now pass the official state expertise, which concerns the recoverable reserves as well.
What is important about the new system is that it is based on the project approach and it now has an economic component. These factors have enabled us to harmonize the Russian classification with the frame international UN system. Thus, our reserves evaluation system has been recognized by the global community for the first time in history. And this means that the reserves in the State Register will soon be used by Russian and foreign financial institutions (banks, stock exchanges) while taken decisions on investment.
- What are the objectives of The SRC for 2017?
- We are going to continue working on improvement of regulatory and guidance documents needed for implementing the new system. A lot of it has already been done.
We are also planning to prepare a new classification of solid minerals. The SRC has a lot to do with the UN. Case study, in particular, which is comparing the methods of HC reserves calculation and working on the document defining the notion of the Competent person, a key notion in the global community, when speaking about an expert qualification.
One of the biggest efforts that we take is the development of expert community. In Russia there is still no notion of the expert in the sphere of subsoil use and reserves estimation recognized on the state level. We have a lot of work to do so that the experts, who, in my opinion, are among the best in the world, could be recognized as such both by Russia and the global community.