When oil prices go down by only $1.00 per barrel, Russian budget loses $2.2 billion, because two thirds of export and over half of revenues of the Russian budget consist of oil and gas proceeds.
However, one should not expect that everything will just fall back in place, warned specialists of the Russian Institute of Energy and Finance.
US will be able to easily go through price reduction to $50.00 per barrel, Nikolai Ivanov, employee of the Institute, says in his report. Even if this oil price stays the entire year and the production will go down by 500,000 barrels a day, this will not be enough to change situation at the market, the expert said.
Note: At present the US extracts 11.81 million barrels of oil a day. By the end of 2014 the US was the world leader of oil production, while Russia with 10.93 million barrels a day was on the second place. US outrun Russia in gas production five years ago. In both cases this has been achieved at the expense of shale technologies. They ensured 100% of growth of oil production and about 95% of gas.
“The shale revolution has just started. This is the matter of technologies. The production will continue growing even with the current oil prices,” Ivanov said.
Meanwhile, the US has found the way out of this situation. The US has learned to find the sections and horizons, where production remained profitable even with minimum prices. The expert said today the same is happening with oil production.
Ivanov concluded that the shale production is maneuverable both from geographic and economic viewpoints. The shale oil production becomes less dangerous for the environment. The main barrier for development of shale oil and gas production are fears of the environmentalists. Ivanov said that the new improved technologies have solved this problem to a great extent. The expert does not claim that any shale production is harmless for the environment: “Any work could be done well or poorly, neatly or dirtily.”
