Sberbank participates in the development of the concept of the unfinished wells Fund in Russia and intends to Finance its creation.
This was announced by the Deputy Chairman of the Board of the Bank A. Popov.
A. Popov's Theses:
we welcome the government's initiative to create the unfinished wells Fund and are actively involved in the development of its concept;
it is assumed that banks, including Sberbank, will Finance the creation of production wells, which will be in demand in the future, when the demand for oil recovers;
I would like to emphasize that this is not only a business for the Bank, but also a long-term investment in developing relations with our clients.
The Deputy Minister of energy is an active supporter of the idea P. Sorokin - архитектор The Vienna agreement of OPEC+
The essence of the idea of creating a Fund of unfinished wells in the conditions of decreasing demand for drilling:
save your skills and personnel,
create the necessary Fund of unfinished wells that are ready for rapid start-up if production growth is required.
To encourage this, the authorities are working on an incentive mechanism in the amount of the Central Bank's refinancing rate, which will be applied after the wells are put into operation, in order to reduce the cost of ownership of the well during its unproductive period.
We remind you that:
May 23, 2020 in Moscow. Putin instructed the government to create conditions for the formation of a Fund of unfinished oil wells in order to maintain the domestic oilfield service.
in June 2020, the Minister of natural resources of the Russian Federation Dmitry Kobylkin said that the Ministry has requested the Ministry and the government with a proposal for a systematic support of oil service companies,
Rosnedra expressed readiness to take part in creating conditions for the formation of a Fund of unfinished wells using domestic technologies and equipment.
Then the Chapter Ministry of energy A. Novak stated that the total volume of preferential lending for the creation of the Fund for 2 years is estimated at 400 billion rubles.
He noticed, that as a result of the creation of the Fund oilfield service companies:
they will receive vital orders;
they will be able to preserve technologies, competencies and specialists;
Where can I get 400 billion rubles?
These may be soft loans for oil companies.
How many wells will there be in the Fund?
Under the new version of the OPEC Vienna agreement + Russia is cutting production by 2 million barrels / day.
Basically, these are not greenfields, but Mature fields with high productivity water cut.
A. Novak used to say that some wells may be lost.
According to the Ministry of energy, the operating Fund of wells in the Russian Federation is about 180 thousand units.
With production of 11.3 million barrels / day in 2019, the average production rate is about 63 bpd.
The cost of drilling 1 well varies in the range of 70-570 million rubles, that is, 400 billion rubles can be built on average about 3-3.3 thousand incomplete wells, the bottom of which is not brought to the bottom petroliferous horizon's.
Oil and gas companies will be able to increase production quickly and with maximum efficiency when the market is restored.
According to the preliminary plan, Russian oil companies, with the support of banks, will order more services and equipment for the development and preparation of new oil wells from Russian oilfield service companies than is necessary in 2020-2021.
For the future, so to speak.
The creation of the Fund will create a potential resource base for a rapid recovery of oil production after the completion of the OPEC+ deal, but on the condition that these reserves are confirmed.
There are risks, but you can't do it without support.
The authorities should take into account that when drilling oil wells deposits' in practice, the principle of "from the known to the unknown" is implemented: when drilling each subsequent well, the drilling results of the previous one must be taken into account.
In the case of incomplete wells, this principle will not work if we are talking about wells that have opened a productive reservoir during drilling and are lined with a metal casing, but without secondary opening of the productive reservoir by perforation.
That is, in all these unfinished wells, it is probably not planned to cause an influx of oil before their permanent operation begins.
This can create significant risks of non-confirmation of oil reserves or the flow rate of a new oil well.
But the risks are justified, since the initiatives proposed by the authorities will benefit the entire oil and gas sector and help independent oilfield service companies stay afloat.
Additional external financing will also provide significant incentive support for in-house services, since in a low-price environment, their financing by the parent companies will probably be carried out on a residual basis.