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Russia with preparations for resuming production after the reduction agreement expires
Date: Click quantity: 40

A statement issued by the Russian government on May 26 stated that the Russian government has temporarily approved a plan to drill idle oil wells in order to prepare for the resumption of oil production after the global production restriction measures expire in 2022.

As part of the agreement reached with the Organization of Petroleum Exporting Countries, Russia agreed in May and June to reduce its daily oil production by about 2.5 million barrels to 8.5 million barrels, the lowest level in more than a decade.

The office of Russia’s first deputy prime minister, Andrey Belousov, said a government member met on Tuesday and agreed to support the Ministry of Energy and Finance’s proposal to help oil producers establish an “unfinished well” fund.

The move is intended to help oil companies cope with global production restrictions and the decline in demand caused by the spread of new coronaviruses.

The statement quoted Russian Energy Minister Alexander Novak as saying that oil producers would order drilling services and equipment from Russian oil service companies with the help of funds from local banks.

These wells will be drilled from 2020 to 2021, but they will remain idle until the current agreement expires in April 2022. These wells will be launched based on expected demand in the next few years.

The statement said the measure would stimulate oil companies to invest funds in the further development of the oil field.

The mission of the Department of Energy is to complete the project by June 5 to "further cooperate with the banking industry."