The End of Russian Oil

[terr]

(BTW he wrote this on the 18th. On the 19th Halliburton, Schlumberger and Honeywell announced they are stopping all business with Russia)

https://zeihan.com/the-end-of-russian-oil/

The Western supermajors have left. All of them. Just as the Ukraine War began, Exxon and BP and Shell have walked away from projects they’ve sunk tens of billions of dollars into, knowing full well they won’t get a cent of compensation. Halliburton and Schlumberger’s operations today are a shadow of what they were before Russia’s previous invasion of Ukraine in 2014. Between future sanctions or the inability of the Russians to pay them with hard currency, those operations now risk winding down to zero. The result is as inevitable as it is damning: at least a 50% reduction in the ability of Russia to produce crude. (No. Chinese oilmen cannot hope to keep things flowing. The Chinese are worse in this space than the Russians.) The outstanding question is how soon?

Sooner than you think. It’s an issue of infrastructure and climate.

 

[terr]

Weatherford International and Baker Hughes announced they are stopping all business with Russia as well.

 

[ipatent]

Russia possesses all the technology it needs to produce oil itself.

 

[terr]

Russia possesses all the technology it needs to produce oil itself.

No, it doesn't.

 

[M.W.]

Outside investments or not they will still produce sufficient amounts of oil and natural gas to supply themselves and ship literal boatloads to China or other nations.

The US must decide whether it wants to insist on driving its strategic goals to supply Europe with more expensive LNG and risk in the process to drive a wedge between its relationship with Europe or whether to support a peace treaty between the Ukraine and Russia with the Ukraine promising that it won't seek Nato membership. That is what it comes down to. Europe is very much in favor of such solution as Europe never was really keen on either granting Ukraine EU or Nato membership.

 

[terr]

This is from Russians themselves:

https://www.cdu.ru/tek_russia/articles/1/804/

The percentage of imported equipment in oil industry:

Drilling at an angle and horizontally: 61%
Oil Refining: 49%
Shelf oil production: 68%
Liquid gas production: 68%
Oil Exploration: 48%

(These are BTW not exactly accurate. I know people who work in the industry that produces this equipment in Russia. A lot of the equipment that is nominally produced in Russia requires imported parts that would be under sanctions right now).

 

[ipatent]

This is from Russians themselves:

https://www.cdu.ru/tek_russia/articles/1/804/

The percentage of imported equipment in oil industry:

Drilling at an angle and horizontally: 61%
Oil Refining: 49%
Shelf oil production: 68%
Liquid gas production: 68%
Oil Exploration: 48%

(These are BTW not exactly accurate. I know people who work in the industry that produces this equipment in Russia. A lot of the equipment that is nominally produced in Russia requires imported parts that would be under sanctions right now).

These are mostly offshore or enhanced recovery techniques. Russia can pump plenty of oil without them.

 

[SunTrader]

These are mostly offshore or enhanced recovery techniques. Russia can pump plenty of oil without them.

How about something more to back this up than just your opinion.

 

[RGLD]

Can you elaborate more on the chinese being unable to help? I figure the sanctions are only applied for the west, can Russia sell to China? Make a deal with chinese oil companies instead?

If they need equipment, can't the chinese supply them?

 

[terr]

The Chinese buy sophisticated oil equipment from the West as well.