10-12-02 Like many things in post-Soviet Russia it is supposed to be a state secret. But that does not stop the world's oil majors from hotly debating exactly how big Russia's crude oil reserves are. Estimates of proven reserves vary wildly, from the US Oil and Gas Journal's 48.6 bn barrels to analyst estimates which are three times higher.
The experts agree on one thing. Russia's oil reserves are big enough to support booming oil exports for decades to come.

Oil output hit 8 mm bpd in November -- some 3 bn barrels a year -- for the first time in a decade. Russia exports half as crude oil and a quarter as products, making it the second exporter after Saudi Arabia. But the Middle East producers still dwarf Russia in terms of reserves with Saudi Arabia holding some 261.8 bn barrels and Iraq 112.5 bn, according to BP estimates.
"Russia could get production to 9 (mm bpd) or perhaps higher by 2010," said Ian Woollen, an analyst from Wood Mackenzie, who puts Russia's proven reserves at 120 bn barrels.

According to information made public by Russia's five largest oil companies, they control more than a combined 70 bn barrels of proven crude oil reserves. LUKoil and Yukos, the two largest companies by market capitalisation, claim to control 14,576 and 12,581 bn barrels of crude respectively.
"If you simply summarise proven oil reserves of Russia's 10 largest oil firms, audited by international auditors, you get a much higher figure than BP's modest estimates," said Mikhail Khodorkovsky, CEO of Yukos, Russia's fastest growing oil firm. He put Russian reserves at 150 bn barrels and said Russian production levels could be maintained for decades. The Russian government relies on oil for 40 % of its budget revenue, and the economy has boomed during the recent period of high global oil prices.

Most estimates include only Western Siberian reserves, exploited since the 1970s and supplying two-thirds of Russian oil, and not potentially huge reserves elsewhere.
"The acreage Russia can offer in Eastern Siberia, the Caspian Sea or Arctic shelf is simply massive," said Paul Collison from Brunswick UBS Warburg. "Compared to what is still available in terms of oil reserves on developed and even emerging markets, Russia's position is simply unique," he added.

Eugene Khartukov, Russia's leading independent energy analyst, put proven reserves at 110 bn barrels, and said Russian companies' reserves to production ratio was much lower than their western counterparts.
"Russia has reserves to keep up its production at current levels for 40 years, while with western majors (large oil companies) the figure does not usually exceed 10 years," he said.

To maintain its industry, the International Energy Agency estimates that Russia will need $ 550-$ 700 bn of investment in energy infrastructure by 2020. Jonathan Stern, energy specialist from Britain's Royal Institute of International Affairs, said the important question would be whether Russia could still attract that investment if the oil price fell below $ 20 a barrel.
"The fascinating question about Russian oil is not how much of it there is but whether the anticipated price is enough to get the fields and transportation routes developed," he said.