Last week when Russia announced a 500,000 bpd cut in oil production in response to sanctions In the West, many doubted whether this was a real choice. Energy Commissioner Kadri Simpson was quick to express her assessment that “it was not Russia’s choice, but it was forced to do it.” According to Ms. Simpson, the Russians “are not able to maintain the same production volumes because they do not have access to the necessary technologies.” But the data shows a different picture.

Russian oil companies posted the largest production volume in more than a decade. Moreover, all indications are that the withdrawal of Western companies from the sector has had little effect on mining activity. This, apparently, explains the fact that oil production recovered in the second half of 2022, despite the fact that the West introduced new restrictions on the export of Russian hydrocarbons. According to Vitaly Mikhalchuk, head of the research center, the former Russian division of the consulting firm Deloitte & Touche LLP, “Russia has managed to retain most of the services, assets and technologies in the oil sector.” However, since the invasion of Ukraine, the political environment for the Russian oil industry has undergone the most dramatic change since the collapse of the Soviet Union. Major Western oil companies BP, Shell and Exxon Mobil Corp have abandoned their multi-billion dollar investments in the country and left. They were followed by some of the most important international service companies. Europe has also imposed “extensive restrictions on the export of equipment, technology and services to the Russian energy sector.”

But again, over the past year, Russian oil companies have produced record production, recording the highest level of activity in more than 10 years, according to industry data compiled and analyzed by Bloomberg. The total number of new oil wells increased by nearly 75 to over 7,800, with most of the country’s major oil companies reporting better results than a year earlier.

The factors that have supported the Russian oil industry are many and varied. One of them is the fact that, according to Vygon Consulting, in 2021 international companies accounted for only 15% of the total volume of oilfield services in Russia. Most of the market is made up of domestic companies such as Rosneft PJSC, Surgutneftegaz PJSC and the Gazprom group. Another factor is that some major Western oilfield service companies have not left Russia. Among them are SLB Weatherford International Plc, which are still active in the country, albeit with some restrictions. The third factor is that the Western giants Halliburton Co and Baker Hughes Co, who left Russia, sold their operations to domestic entrepreneurs. Thus, their units have retained both their personnel and the skills they had before, Kpler analysts say. And so far, there is no sign that the EU ban on Russian oil imports has created problems for the Russian oil industry. 5th of December.