The energy Ministry had predicted possible reduction of oil production by half by 2035

According to the General scheme of development of oil industry of Russia until 2035 developed by the Ministry of energy, oil production in Russia in 20 years will decrease from 1.2% in the best case scenario and 46% in the worst, writes the newspaper “Vedomosti”, the disposal of which was a copy of the document. A source in the Ministry confirmed the authenticity of the document.

The General scheme should be adopted to replace the 2011 scheme, which is valid until 2020. The basis for the analysis of selected 2014, the price of Urals crude at $80 per barrel by 2020 and $97.5 per barrel by 2030. In December the energy Ministry has sent the document for interagency coordination.

As noted by “Vedomosti”, in the scheme of the considered four scenarios: a moderately favorable, assuming favorable pricing, the lifting of sanctions no later than 2016, optimization of tax burden, etc., the baseline scenario, the minimum scenario assuming low oil prices and the continuation of the sanctions, as well as “company plans” considering the extraction on current and forthcoming until 2022.

None of these scenarios does not provide for the growth of oil production compared to year 2015. In the first and last scenarios, the energy Ministry predicts only short-term growth up to 2020. But by 2035, according to the General scheme of Russia expects decline of oil production from 1.2% in the best case and 46% in the worst.

Slightly increased production of only small companies Slavneft and RussNeft, as the leaders of the market due to the depletion of existing fields and unfavorable tax conditions, it will fall on 39-61%.

The document States that the already producing fields can provide up to 2035 less than half of the production, the rest must be obtained at the expense of growth of proved reserves due to geological exploration work.

To counter declining oil production, the Ministry of energy proposes to grant private companies access to the shelf, to ease the tax regime, to legislate the status of small and medium independent companies and to support them. It is also proposed to stimulate the processing of high-sulfur and high-viscosity oil, for example through the introduction of preferential rates of excise taxes on the fuel produced from such oil.

At the same time in the General scheme of Ministry of energy noted that production of gas condensate will grow in 20 years in three scenarios — from 37 to 74%. The current customs tariff system, the demand for Russian oil in Europe until 2020 will decline, the document says. While deliveries of Russian fuel oil and diesel fuel will rise. Then (with the introduction of a 100% duty on oil in 2017) of oil supplies will grow again and by 2035 could increase by 10-14% compared to 2014. The Asia-Pacific region, mainly China, will increase the import of Russian oil by 2035, 1.8–2.2 times compared to 2014, but the demand for Russian oil products will remain at the current level.

Representatives of oil companies had not responded to the requests of “Vedomosti”. The representative of the Ministry of energy declined to comment, the Finance Ministry did not respond to a request “Vedomosti”.