Fracking has been around in various forms since the late 1940's and there must be hundreds of thousands of wells throughout the world where hydraulic fracturing has been used to increase oil production. Fracking here, in the UK, fracking there in France and Germany and fracking everywhere, including Russia where it has been used in the oil industry for years.

The big story developing internationally of course is how to use the current generation of shale technology to increase oil production. If it happens in places like the Permian, Bakken and Utica, it can technically be made to happen in the UK, France and for example West Siberia:

Russian Prime Minister Vladimir Putin on Thursday approved a package of stimulus measures to unlock vast untapped unconventional oil resources in Western Siberia that could boost Russian oil production by up to 2 million barrels per day.

The proposals would encourage investors in Russia, whose status as the world's top crude producer is threatened by falling conventional output at Soviet-era fields, to expand use of costly hydraulic fracturing and other chemical enhanced recovery methods.

"Fracking," which brought a boom in U.S. unconventional oil and gas output, is already in use at some fields in Western Siberia, the Soviet-era oil heartland, but has yet to open up the so-called tight oil targeted in the proposals.

"This will open a second life for Western Siberia. The impact on Russian oil output will be very significant," Deputy Energy Minister Pavel Fedorov said after Putin signed a decree ordering the government to refine the package of stimulus measures by Oct. 1 and turn them into legislation.

"The potential is pretty substantial from learning how to produce from tighter formations. There is a grey area between tight rock formations and formations in west Siberian regions which produce today."

This was also foreshadowed by the recent Rosneft/ExxonMobil activity. This will be very interesting. Putin was pushing shale gas as environmental tragedy as little as two months ago.

Bad for gas, but good for oil? You can't have it both ways. Once Russia discovers, as the US has, that fracking for oil is far more productive, and profitable, expect the tune to change.

Add comment


Security code
Refresh