In a significant shift on March 7, 2024, the Dörtyol oil terminal in Türkiye’s Hatay province announced its decision to stop accepting Russian crude oil imports. This move comes as a direct response to the tightening of U.S. sanctions against Russia following its invasion of Ukraine in early 2022. The Dörtyol terminal, previously known for its business with Iraqi crude, had seen an influx of Russian oil as Europe imposed restrictions and Russia sought alternative trade routes. In 2023, the terminal reported record levels of Russian crude passing through Türkiye to Europe, in direct contravention of EU sanctions. Global Terminal Services (GTS), which operates Dörtyol, stated that this cessation is an added precaution to ensure compliance with international sanctions, despite all previous operations fully adhering to them, including the G7’s price cap on transporting Russian oil.

On March 7, 2024, Gazprom, Russia’s energy behemoth, filed a lawsuit in a St. Petersburg court seeking compensation exceeding $900 million from Polish entities. The exact reasons behind the financial demands remain undisclosed, amidst ongoing tensions between Gazprom and European entities over energy supply and contractual disputes.

On March 6, 2024, Gazprom completed a new gas pipeline project in Kukuevka village, Kursk region, extending the natural gas network by 723 meters to service 40 households. This development reflects Gazprom’s ongoing efforts to improve energy accessibility in Russia, contributing to rural development and environmental sustainability.

The Kazakh Energy Ministry announced plans on March 5, 2024, to increase the transit of Russian gas to Uzbekistan through Kazakhstan’s territory, aiming to boost the annual volume from three to eleven billion cubic meters by 2026. This strategic move aims to enhance regional energy cooperation and ensure stable gas supplies amidst growing demand.

An explosion on March 5, 2024, caused significant damage to an oil reservoir in the Belgorod region, near Russia’s border. Emergency response teams were promptly deployed to manage the situation and mitigate any environmental impacts, underscoring the challenges of maintaining energy infrastructure safety in volatile regions.

Gazprom has successfully commissioned a 14 km gas pipeline in Razvyazka Village, Chelyabinsk Region, on March 4, 2024, connecting 417 households to the natural gas network. This infrastructure development marks a significant step towards enhancing local energy accessibility and supports Gazprom’s ongoing efforts to expand gasification across Russia, demonstrating the company’s commitment to improving the quality of life and energy security for its citizens.

On March 3, 2024, Russia declared plans to cut its oil production and exports by an additional 471,000 barrels per day in the second quarter, aligning with certain OPEC+ members. This move reflects Russia’s strategic adjustments to global oil market dynamics and its collaborative efforts within OPEC+.

On March 1, 2024, Deputy Prime Minister Alexander Novak expressed the Russian government’s expectation for the swift completion of a regasification terminal in Kamchatka, aiming for regional gasification enhancement. This project is part of Russia’s broader efforts to expand its energy infrastructure and secure energy supplies for its remote regions.

On March 1, 2024, Gazprom completed a 56.1 km inter-settlement gas pipeline in the Komi Republic, facilitating gasification in six settlements. This project underlines Gazprom’s ongoing efforts to expand access to natural gas across Russia, contributing to the country’s energy security and regional development.

On March 1, 2024, Hungary’s Foreign Minister, Peter Szijjarto, announced at the Antalya Diplomacy Forum that Turkey and Bulgaria have agreed to ensure the continuation of Russian gas transit to Hungary in the coming years. This development followed discussions between Hungarian Prime Minister Viktor Orban and the leaders of Turkey and Bulgaria, highlighting Hungary’s strategic efforts to secure its energy supplies.

On February 29, 2024, Gazprom inaugurated a 7 km gas pipeline in Lapinki, Ostrov, Pskov region, Russia, facilitating gas access for 200 households. This development is part of Gazprom’s ongoing efforts to improve gasification across the region.

Deputy Prime Minister Alexander Novak forecasted Russia’s oil production to be between 520-530 million tons in 2024, slightly adjusting from over 530 million tons in the preceding year.

On February 28, 2024, Russia reported a 6.8% increase in natural gas production in January 2024 compared to the previous year, reaching 55.7 billion cubic meters. The country also saw a 12.9% rise in LNG output during the same period, showcasing an upward trend in its energy sector.

In a strategic move to stabilize domestic gasoline prices and meet the increased consumer and agricultural demand, Russia declared a six-month suspension of gasoline exports starting March 1, 2024. This decision, as reported by Reuters on February 27, 2024, aims to address the seasonal surge in fuel requirements, particularly during spring agricultural activities, refinery maintenance periods, and the summer holiday season.

Alexander Novak, Russia’s Deputy Prime Minister, confirmed the prohibition, which was officially sanctioned by Prime Minister Mikhail Mishustin. This regulatory action was propelled by Novak’s insights on impending fuel demand challenges outlined in a proposal dated February 21, 2024. The ban is anticipated to mitigate domestic gasoline price volatility, a matter of significant concern for Russian motorists and the agricultural sector, especially leading up to the presidential election set for March 15–17, 2024.

South Africa’s ambassador to Russia, Mzuvukile Jeff Maqetuka, indicated that South Africa is actively considering importing crude oil from Russia among other global suppliers. The ambassador highlighted South Africa’s interest in diversifying its oil sources, including potential supplies from Russia, underscoring the country’s openness to global trade opportunities.

Gazprom announced on February 26, 2024, the completion of a new 18 km gas pipeline in Kirillov, Vologda region, marking a significant step in Russia’s domestic gasification efforts. The project extends gas access to over 250 households, highlighting Gazprom’s commitment to expanding energy infrastructure within the country.

Gazprom has inaugurated an inter-settlement gas pipeline stretching 4.3 km to the village of Grigorovo in the Bolkhovsky district of the Oryol region. This infrastructure development is expected to enhance the quality of life in the village by providing access to network gas. Gazprom has reported receiving applications for gas connections from local residents, indicating a positive response to the project.

On February 21, 2024, Gazprom announced the commissioning of new gas pipelines in various regions of Russia, marking significant progress in the nation’s gasification efforts. In the Novospassky district of the Ulyanovsk region, a 4.7 km gas distribution network was introduced, providing gas to 89 households in the villages of Samaykino and Fabrichnye Vyselki. Similarly, the village of Sidelnikovo in the Republic of Mari El celebrated the completion of its gasification, with a newly built pipeline under the Program for the Development of Gas Supply and Gasification of the Republic. Another noteworthy development was in the Leninsky district of Tomsk, where gas distribution networks spanning 4.9 km were launched to serve 132 households. These projects underscore Gazprom’s commitment to enhancing regional gas supply and infrastructure.

The Syzran Refinery is actively pursuing a dual-focused program aimed at boosting operational efficiency and environmental performance. Throughout 2023, the refinery embarked on several energy sector projects as part of its comprehensive efficiency improvement strategy. These initiatives not only aim at enhancing production efficiency but also significantly reducing carbon footprint, underscoring the refinery’s commitment to sustainable practices.

Russia produced 24 million metric tons of offshore oil in 2023, as stated by Deputy Prime Minister Alexander Novak during the Russia exhibition.

Energy Minister Nikolay Shulginov announced at a press conference that Russia’s domestic oil production is expected to total 523 million metric tons in 2024.

Energy Minister Nikolay Shulginov stated that Russia reduced its oil refining volume by 7% since the year’s start, aiming to keep it at the 2023 level of 275 million tons through the end of 2024.

Deputy Prime Minister Alexander Novak reported that Russian oil production in Eastern Siberia totaled 54 million tons in 2023, with offshore production reaching 24 million tons.

RussNeft achieved a significant increase in oil reserves in 2023, adding 8.3 million tons, primarily through its operations at the Tagrinskoye field. The company reported an impressive reserve replacement rate of 174%, producing 6.434 million tons of oil and 2.11 billion cubic meters of gas with a 96.6% APG utilization rate. New technological advancements have led to the commissioning of 69 oil wells and a notable increase in the overhaul period of the mechanized well stock to 834 days.

Rosneft announced its hydrocarbon production for 2023 totaled 269.8 million tons, with liquid hydrocarbons accounting for 193.6 million tons. Gas production reached 92.7 billion cubic meters, excluding process needs.

According to the Center for Energy and Clean Air Research (CREA), Russia currently earns more than $551 million a day from the sale of oil and gas, despite attempts by the U.S., EU, and other countries to limit its revenue from fossil fuel exports.

However, CREA analysts predict that the ceiling of Russian oil prices may be lowered to $30 per barrel in the future, which could lead to a drop in Russia’s fossil fuel revenue to $340 million a day. Europe may also completely abandon LNG and pipeline oil supplies from Russia, further reducing its revenue.

Russia’s current fossil fuel revenues are only slightly below what the country was earning on average in May 2021, despite some countries boycotting Russian raw materials. The EU has banned maritime imports of Russian oil and oil products, but EU countries continue to import Russian oil and gas via pipeline or in the form of LNG.

A new gas deposit was discovered at the Leningradskoye field of the Yamal gas production center, Gazprom said on October 8, 2020.

As a result of drilling and testing of an exploratory well, commercial gas inflow of approximately 600,000 cubic meters per day has been achieved. This proves that the new deposit contains considerable volumes of gas. The commercial value of the field is therefore much higher today than in the past.

This is the fourth major discovery made by Gazprom in the past two years on the Yamal Peninsula shelf in the Kara Sea.

The company will calculate the newly discovered reserves of the Leningrad Field and submit the results to the State Reserves Commission for registration in the State Register.

PetroNeft, an oil and gas exploration company operating in Russia’s Tomsk region, has announced the successful test of a mini-oil refinery ahead of the projected timeline. The company owns and operates 50 percent of licenses 61 and 67 in the region. The successful test of a mini-refinery processing unit took place on license area 61, with regulatory approval expected by the first quarter of 2021. The project significantly reduces operating costs.

In January 2020, the company started the construction of a mini-oil processing plant on license area 61 to obviate having to purchase significant quantities of diesel fuel needed for machinery and power generation in production facilities, especially in the winter months. The project will reduce operational costs by more than USD600,000 by 2021. It will also further improve the profitability of the company by allowing the sale of surplus products on the local market at a significant premium to unrefined barrels.

On October 6, 2020, Volga Gas plc, the oil and gas exploration and production company operating in the Volga region of Russia, announced the potentially significant discovery of a new oilfield as part of its ongoing exploration drilling program.

As announced on August 14, 2020 and published in the interim report of September 30, 2020, the Group is conducting a program to drill six exploration wells within its Karpenskiy License Area in structures separate from its existing oil reserves in the Uzen Field.

The presence of oil has been detected in a Triassic sandstone formation in a well in the north of the Uzen field. 

The Tatneft Group produced 2,104 thousand tons of crude oil in September, and the production volume since the beginning of the year amounted to 19,548 thousand tons, which was 2,803.7 thousand tons less than in the same period of 2019.

Tatneft’s production in September amounted to 2,078 thousand tons of crude oil, and the company’s production since the beginning of the year amounted to 19,307 thousand tons (a decrease of 2,799 thousand tons compared to the corresponding period of 2019). Tatneft’s production from license areas outside Tatarstan amounted to 25,000 tons in September and since the beginning of the year to 240.7 thousand tons, a decrease of 4.05 thousand tons compared to the corresponding production volume in 2019. The production volume of high-viscosity oil in September was 284.9 thousand tons and since the beginning of the year 2,468 thousand tons, which is 501.1 thousand tons more than the volume for the corresponding period of 2019.

On September 23, 2020, Lukoil shared its successful experience in integrating digital technologies into hydrocarbon production with Russian experts and businessmen at the 11th Tyumen Oil and Gas Forum. The project to digitize the company’s production offers integrated field models that enable the management of oil and gas facilities to be optimized. These digital models contribute to the efficient production of hydrocarbons in the fields of the Bolshevik basin (Yamal-Nenets autonomous district) and the Yuzhno-Yagunskoye field (Khanty-Mansi autonomous district, Yugra), where an integrated operations center has been established. Similar centers are being built at the production facilities of Povkhneftegaz and Pokachevneftegaz in Western Siberia.

Shale gas production is expected to continue in just a few countries around the world besides the United States.

On November 19, 2019, the Gazprom board of directors took note of the information regarding the growth prospects of the shale gas and liquefied natural gas (LNG) industry across the world, as well as the opportunities and the threats facing the company.

It was highlighted that the share of the United States in the global shale gas production exceeded 95 percent in 2018. According to current forecasts, the U.S. will remain the main producer of shale gas for the long term.

It is expected that shale gas production outside of North America will not have a significant impact on the global gas market configuration and Gazprom’s future export activities, as far out as 2030.

Lukoil’s operating results: analysis of financial condition and results of operations for the three-month periods ended September 30 and June 30, 2019 and the nine-month periods ended September 30, 2019.

The primary activities of Lukoil and its subsidiaries are hydrocarbon exploration, production, refining, marketing, and distribution.

Gazprom posts IFRS net profit of RUB1.10 trillion in 9M 2019.

On November 29, 2019, PJSC Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) for the nine months ended on September 30, 2019.

Sales (net of excise tax, VAT, and customs duties) decreased by RUB203,252 million, or three percent, to RUB5,698,339 million for the nine months ended September 30, 2019 compared to the corresponding period of the prior year. The decrease in sales was mainly due to a change in volumes sold and a change in average prices.

Gazprom held its 14th annual Investor Day in Hong Kong (February 26) and Singapore (February 28).

Taking part in the events were Andrey Kruglov, deputy chairman of Gazprom’s management committee, Oleg Aksyutin, member of the management committee and department head at Gazprom, Elena Burmistrova, director general of Gazprom Export, and representatives of the company’s relevant subdivisions and its subsidiaries Gazprom Neft and Gazprom Energoholding.

The events were once again attended by representatives of the world’s leading investment funds and banks, as well as credit organizations from the Asia-Pacific region, continental Europe, the U.K., the U.S., and Russia, including analysts from Bank of America Merrill Lynch, Morgan Stanley, Sova Capital Limited, and Gazprombank.

The livestream of the Investor Day was also available on the internet.

Rosneft Deutschland GmbH, a Rosneft subsidiary, started direct marketing operations in order to increase the company’s efficiency. The company markets all refined products produced by Rosneft Deutschland at three refineries in Germany. The products range includes gasoline, diesel, heating oil, jet fuel, LPG, bitumen, fuel oil, and petrochemical products.

Rosneft Deutschland markets oil products not only from the three refineries directly, but also from more than 30 lifting locations throughout Germany via road, rail, and barge. Rosneft Deutschland has an established client base of more than 500 customers in Germany, Poland, the Czech Republic, Switzerland, Austria, and France.

The Fifth OPEC and non-OPEC Ministerial Meeting was held in Vienna, Austria, on December 7, 2018, under the co-chairmanship of OPEC’s President, HE Suhail Mohamed Al Mazrouei, Minister of Energy and Industry of the United Arab Emirates and head of its delegation, and Alexander Novak, Minister of Energy of the Russian Federation.

The meeting recalled the rights of the peoples and nations to permanent sovereignty over their natural wealth and resources.

Lukoil announced the results of the reserves assessment and independent audit as of December 31, 2018.

According to the SEC classification, the company’s proven hydrocarbon reserves totaled 15.9 billion barrels of oil equivalent, 76 percent of which stood for liquids. The proven reserves replacement ratio for liquids totaled 101 percent. In Russia, the main region of Lukoil’s operations, the replacement ratio reached 127 percent. The company’s proven hydrocarbon reserves life is 19 years.

As a result of geological exploration and production drilling conducted in 2018, Lukoil added 576 million barrels of oil equivalent to proven reserves with the largest contribution from production drilling in West Siberia and Timan-Pechora.

On April 30, 2018, the deep-water pipelay for the first line of the TurkStream offshore gas pipeline has been completed off Turkey’s Black Sea coast.

The average rate of the deep-water pipelay carried out by the pipelaying vessel Pioneering Spirit was 4.3 kilometers per day. The maximum pipelaying rate of 5.6 kilometers per day was reached two times in February 2018.

In accordance with the schedule, the project is being simultaneously implemented onshore in Russia and Turkey and in the Black Sea. The receiving terminal is being constructed near the settlement of Kiyikoy, Turkey. Upon the completion of the landfall sections, work on the first line will be completed. Following the schedule, Pioneering Spirit will continue the deep-water pipelay of line two in the third quarter of 2018.

On June 5, 2018, the chairman of Gazprom’s management committee Alexey Miller and the chairman of OMV’s executive board Rainer Seele signed an agreement to extend until 2040 the existing contract between Gazprom Export and OMV Gas Marketing & Trading GmbH for Russian gas supplies to Austria. The original contract was valid until 2028.

Russia’s President Vladimir Putin and Austria’s Federal Chancellor Sebastian Kurz attended the signing as part of celebrations marking 50 years of supplies of Russian gas to Austria.

“The Agreement signed today is yet another testament to the growing need for gas imports both in Austria and in Europe in general – the need that Gazprom is ready to satisfy. By implementing the construction project for the Nord Stream 2 gas pipeline, we will make gas deliveries even more reliable for the benefit of consumers,” Alexey Miller said.

On May 26, 2018, Gazprom and the government of Turkey signed a protocol for the construction of the onshore section of the TurkStream gas pipeline. The pipeline will deliver Russian gas to European consumers. As a follow-up to the protocol, Gazprom and Botas inked an agreement detailing the terms and conditions of the construction work. TurkAkim Gaz Tasima A.S., a joint venture that will be established on equal terms, will build the onshore section.

In addition, Gazprom Export and Botas signed documents to settle out of court the ongoing arbitration dispute on the contract terms of Russia’s gas supplies to Turkey. The arbitration will be resolved shortly.

On May 25, 2018, director general of Gazprom Energoholding Denis Fyodorov and the chief financial officer of Siemens Alexander Liberov signed a strategic cooperation agreement. The agreement sets out the main directions and principles of cooperation in the field of technological upgrades of Gazprom Energoholding’s generating facilities with the use of Siemens-manufactured innovative electrical equipment. Specifically, one of the priority areas of joint work is the introduction of vacuum generator switches and high-tech components in the construction and upgrading of power units.

Siemens plans to set up its manufacturing facilities to make that equipment in Russia and bring the local content of its finished products to at least 50 percent by 2020, with an option for a phased increase to 75 percent by 2022.

On April 26, 2018, Gazprom published its audited consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) for the year that ended on December 31, 2017.

Total sales (net of excise tax, VAT, and customs duties) increased by RUB435,092 million, or seven percent, to RUB6,546,143 million for the year that ended on December 31, 2017 compared to the year that ended on December 31, 2016. The increase in sales was mainly driven by an increase in sales of refined products and crude oil.

On May 14, 2018, Rosneft released its first quarter results for 2018. The company’s average daily hydrocarbon production stood at 5.71 million barrels of oil equivalent (mmboe), which is a figure close to the level observed in the first quarter of 2017. Liquids production increased 0.3 percent quarter-on-quarter. Gas production in the reporting period amounted to 16.9 billion cubic meters (bcm). The company also managed to achieve refining quality improvement with the light products yield reaching 58.8 percent and the refining depth increasing to 75.4 percent.

Upstream

Hydrocarbon production at Rosneft reached 5.71 mmboed in the first quarter of 2018, remaining close to the level observed in the fourth quarter of 2017.

On May 25, 2018, during the St. Petersburg International Economic Forum, Rosneft and Bashneftegeofizika signed an agreement for working together in developing high-tech LWD (logging while drilling) equipment for horizontal well drilling, as well as equipment for pay zone well testing in the exploration drilling of oil and gas wells.

The volume and complexity of the construction of horizontal wells at Rosneft’s fields in recent years has been constantly increasing. The share of horizontal wells in the overall number of the wells drilled increased to 36 percent in 2017. The number of new horizontal wells with multistage hydraulic fracturing increased by 67 percent. For instance, in the first quarter of 2018, the number of new horizontal wells with multi-stage hydraulic fracturing that were put into operation increased by more than 65 percent compared to the first quarter of 2017.

Rosneft has opened an international research and development (R&D) center in Qatar, which will become a full-scale representative office of the company. The new office will perform scientific and technical activities, as well as promote the company’s business in the region.

The research and development center will be located at the Qatar Science and Technology Park (QSTP), which is a part of the Qatar Foundation (QF).

QSTP is one of the world’s leading science incubators that provides a unique economic environment for enterprises engaged in the development and the implementation of new technologies, including those in the energy sector.

On April 27, 2018, Lukoil announced that the company completed the installation of a wellhead platform’s topside at the Yury Korchagin field. The Korchagin field, which is now in phase two of its development, lies within the Russian sector of the Caspian Sea.

The wellhead platform is a satellite platform designed to drill wells in the eastern part of the field. Drilling at phase two sites is expected to start by the summer months.

Apart from hosting processing equipment, the platform is equipped with safety systems, living personnel quarters, and a helideck. As most of the operations are automated, only eight workspaces are designed for the temporary stay of the personnel.

The oil and gas produced will be transported to the host platform through subsea pipelines and treated for delivery onshore.

Lukoil’s cumulative production of oil in Russia exceeded two billion tons, the company reported on February 1, 2018. The company’s Russian projects produced jointly no less than 80 million tons of oil annually in the past 14 years.

The first billion tons of oil was produced by Lukoil in 2006, fifteen years after the company was established. The milestone of two billion tons was reached eleven years later.

The uptick in production can be attributed to the recent commissioning of major oilfields, including the Vladimir Filanovsky field in the Caspian Sea, the Pyakyakhinskoye field on the Yamal Peninsula, and the Imilorskoye field in Western Siberia. New technologies have made it possible to increase significantly the production of hard-to-extract hydrocarbons, for instance the super-viscous oil at the Yarega field within the Komi republic.

On May 18, 2018, the board of directors of Novatek resolved to create a transportation subsidiary called Maritime Arctic Transport LLC to manage and optimize transportation costs, build up Arctic navigation skills, and provide for centralized management of the company’s Arctic fleet.

Novatek’s management board chairman Leonid Mikhelson said, “Novatek’s long-term development strategy envisages a significant growth in LNG production from the company’s vast hydrocarbon resource base located on the Yamal and the Gydan peninsulas in the Arctic zone of more than 55 million tons per annum by 2030. Therefore, establishing an efficient Northern Sea Route shipping model is one of the company’s key priorities to realize the long-term strategy. Creating the company’s own shipping company fully supports this goal and will optimize transportation cost and ensure a well-balanced, centralized management structure to improve the competitiveness of Novatek’s Arctic projects.”

On March 27, 2018, Novatek announced that Novatek Gas and Power Asia Pte. Ltd., a wholly owned subsidiary of the company, shipped its first cargo of LNG produced by the Yamal LNG project to the Indian market.

Novatek’s first deputy chairman of the management board Lev Feodosyev said, “One of the company’s core priorities enumerated in the company’s corporate strategy 2030 is the expansion of the supply geography and the growth of the company’s presence in key Asian markets. The first cargo delivered to the growing Indian market is an important development step in this direction.”

On June 1, 2018, Transneft released consolidated interim condensed financial statements prepared according to International Financial Reporting Standards (IFRS) for the three months that ended on March 31, 2018. Crude oil delivery for the three months that ended on March 31, 2018 amounted to 116.5 million tons, 1.2 million tons or 1.0 percent down year-on-year. Oil freight turnover decreased by 1.8 billion ton-km or by 0.6 percent.

Petroleum products deliveries for the three months that ended on March 31, 2018 came to 9.9 million tons. The growth year-on-year amounted to 1.8 million tons, or 22.2 percent.

Transneft’s revenue grew by RUB6.2 billion, or 2.8 percent, mainly due to higher revenues from oil transportation, exports, and other earnings.

On April 5, 2018, Transneft announced that it commissioned the Volgograd Refinery – Tinguta – Tikhoretsk – Novorossiysk petroleum products trunk pipelines (PPTPs), a part of the company’s Yug project.

The implementation of the Yug project entails creating an infrastructure suitable for both pipeline transportation of diesel fuel in the direction of Novorossiysk, a Russian port, and for exporting up to six million tons of crude oil per year from Russia’s Black Sea coast to European countries. The commissioning of the Yug project’s PPTPs was preceded by successful system tests at peak oil pumping modes using an agent, with a number of technical measures taken during the trial.

Tatneft and its affiliated enterprises produced a total of 2,446 thousand tons of crude oil in May 2018, while the production volume for the five months of the current year amounted to 11,910 thousand tons, which was 110 thousand tons less than in the corresponding period of 2017.

Tatneft’s own production amounted to 2,414 thousand tons in May and 11,678 thousand tons within the first five months of the year (minus 101 thousand tons versus the corresponding period of 2017).

The production in the licensed areas outside the Tatarstan republic stood at 29 thousand tons in May, while production over the first five months of the year amounted to 141 thousand tons (minus nine thousand tons versus the initial five-month period of 2017).

At the same time, Ministry of Economic Development predicts a gradual decline in oil prices in 2018.

The average price of the Urals-brand crude oil totaled 52.17 dollars per barrel from January to November 2017, according to a report by the Russian Ministry of Finance published on December 1.

In the corresponding period of the previous year, the average price of a barrel of the Urals-brand crude oil stood at 41.02 dollar. As such, on an annualized basis, for the first 11 months of the current year, the increase in the average price of the Urals oil was 27.2 percent.

The average price of the Urals-brand oil in November 2017 was 61.97 dollars per barrel, which is 1.41 times higher than a year earlier.

Processing volumes in the reporting period will stand at 39.7 million tons.

By the end of 2017, Gazprom Neft plans to increase the production of hydrocarbons some 4.2 percent relative to the previous year. Volumes are expected to go up to 89.8 million tons of oil equivalent, the company said on December 25, 2017.

“In 2017, the volume of hydrocarbon production of Gazprom Neft will be 89.8 million tons of oil equivalent, which is 4.2 percent higher than the volume of production registered in 2016. The annual volume of processing according to preliminary estimates is expected to reach 39.7 million tons,” the company’s statement said.

The development of new large-scale projects in the Arctic region, such as the Novoportovskoye, the East Messoyakhskoye, and the Prirazlomnoye fields have made the largest contribution to increasing hydrocarbon production in 2017.

The U.S.-based oil giant ExxonMobil has challenged the decision of the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department that imposed a fine on the company for violating the sanctions against Russia, the company said in a statement on July 20, 2017.

The U.S. Department of the Treasury fined ExxonMobil a total of two million dollars for violating anti-Russian sanctions related to Ukraine. OFAC’s statement said that the company was punished for signing eight documents in May 2014 with the president of Rosneft Igor Sechin, who had been included on the American sanctions list. The divisions of the U.S. company involved in the deals with Rosneft are ExxonMobil Development Co. and ExxonMobil Oil Corp.

The U.S. State Department later said that the former head of ExxonMobil and the U.S. Secretary of State Rex Tillerson did not participate in the Treasury Department’s imposition of penalties against the company.

The Organization of Petroleum Exporting Countries (OPEC) has called on shale oil producing companies in the U.S. to join the agreement on reducing production. The OPEC’s Secretary General Muhammad Barkindo made the request in a speech at the CERAWeek conference in New Delhi on September 26, 2017. He has called on producers in the U.S. “to show responsibility” and not to allow for the collapse of the price of oil.

“We urge our friends in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learned from the current unique supply-driven cycle,” Secretary General Barkindo said at the conference.

He explained that the need to decrease production comes as a result of the market’s oversaturation. In Mr. Barkindo’s words, the oil supply hasn’t reached a balance in the nine months that the Russia-OPEC agreement has been in effect.

According to Rosneft’s published materials, the company’s program until the year 2022 entails drilling ten search wells and undertaking exploratory works at license areas in the Far East and on the East Arctic shelf. Rosneft’s total spending for exploration and production in the region are anticipated to reach RUB140 billion (USD2.37 billion) in the planning period, the company’s materials released September 8, 2017 suggest.

In the beginning of April, Rosneft started drilling a well at the northernmost Central Olginskaya-1 offshore field in the Khatanga license area in the East Arctic.

Rosneft intends to speed up exploratory drilling on the Arctic shelf, drilling four search wells in the Laptev Sea, and eight wells in the Karsky and the Barents seas. Rosneft now has 28 license areas on the Arctic shelf with total resources of 34 billion tons of oil equivalent. Rosneft’s share comprises 78 percent of total licensed areas in the Arctic.

While the U.S. implemented restrictive measures targeting Russia in connection with the situation in Ukraine, it did not absolutely prohibit American companies from participating in all unconventional projects.

Unconventional reserves include hard-to-extract resources that typically necessitate such techniques as hydraulic fracturing. In the years past, Russian oil companies looked to Western firms to supply the technology for effectively recovering unconventionals.

Despite the sanctions, the Norwegian multinational oil and gas company Statoil still develops Russian unconventional reserves. BP is also looking to undertake a similar project. The reason that the Western companies’ participation in Russia’s unconventional plays is not in breach of U.S. sanctions is that those Southeast Russian sites constitute limestone formations.

During the 9th BRICS Summit in China, Rosgeo and South Africa’s PetroSA agreed to work together on shelf projects, the Russian geological company announced on September 4, 2017.

In particular, the contract provides for exploration and development of blocks 9 and 11A of the southern continental shelf off the coast of South Africa. The agreement envisions a considerable exploratory phase. Three-dimensional seismic prospecting will cover more than 4,000 square kilometers, while gravity-magnetic prospecting will span over 13,000 kilometers. Rosgeo will also drill exploratory wells. The estimated volume of investment is about USD400 million.

Reserves in the region have been estimated at over 50 million tons of oil and over 400 billion cubic meters (14 tcf) of gas. Expected gas resources can reach as much as 1.2 trillion cubic meters (42.3 tcf).