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Investments in geological exploration in Russia total about $6.3 bln in 2016 — minister

March 27, 15:26 UTC+3 ¶ MOSCOW

Explored conventional reserves of hydrocarbons in Russia are estimated to be enough for 30 years if no investments into exploration are made

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MOSCOW, March 27. /TASS/. Investments in geological explorations in Russia totaled about 360 bln rubles ($6.3 bln) in 2016, which is 17% more than in 2015, Natural Resources Minister Sergey Donskoy told TASS.

"Last year, financing [of exploration work] from the federal budget remained at the level of 2015 was about 26 billion rubles [$457 mln]. Financing from the funds of subsoil users exceeded 330 billion rubles ($5.8 bln), which is 17% higher than in 2015. This amount of investment is necessary for the geological industry for replenishment of the reserves of the main types of mineral resources," he said.

"Considering the measures we took to stimulate subsoil users, we can expect more intensive geological exploration and an increase in investments. There are all conditions for that," the minister added.

According to preliminary data, the volume of investments in exploration by ten largest companies reached 232.5 bln rubles ($4.09 bln) in 2016, the Minister said. Of this amount about 211 bln rubles ($3.7 bln) were invested by four largest companies. In particular, Rosneft (including Bashneft) invested 81 bln rubles ($1.4 bln), Gazprom - 75 bln rubles ($1.3 bln), Lukoil - 39 bln rubles ($686 mln), Surgutneftegaz - 17 bln rubles ($299 mln).

Donskoy added that by the end of 2016, the companies had discovered 40 hydrocarbon deposits. Russia received another 60 deposits of solid minerals, he said.

Donskoy noted that the federal budget's funds for hydrocarbon production in 2016 amounted to 13 bln rubles ($228 mln) against 12 bln rubles ($211 mln) in 2015.

This year the federal budget spending on hydrocarbon production will be cut by 7.8% compared to the level of 2016, by 10.5% - in 2018 and by 14.4% 0 in 2019.

Hydrocarbons reserves

Explored conventional reserves of hydrocarbons in Russia are estimated to be enough for 30 years if no investments into exploration are made.

"Explored conventional reserves of hydrocarbons will be enough for 30 years at the least if no investments into exploration and new technologies are made. We are investing annually, therefore after 30 years we will have enough [resources] for the same number of years in advance," Donskoi said.

Until recently the Russian Ministry of Natural Resources considered for development assets discovered in 1970s-1980s and waiting for appraisal and development start, the minister said.

"The next stage follows. I think it is fairly feasible and natural that we are turning to areas with high prospects for new fields’ discovery. The so-called "deep horizons" are also promising and many companies start working with them," Donskoi said.

The ministry also plans to consider the issue of hard-to-recover and nonconventional mineral resources, Donskoi said. "This is the volume becoming promising exactly on account of mastering new technologies and settling organizational matters that should address current market situation, quickly changing prices, etc.," he added.

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