MOSCOW, July 19 (UPI) -- Hydraulic fracturing of oil reservoirs is part of the long-term goal of making drilling operations more efficient, Russian energy company Gazprom Neft said.
Gazprom Neft, the fourth largest oil company in Russia, announced it became the first Russian company to use a multi-stage hydraulic fracturing method while drilling into the Yuzhno-Priobskoye field. First Deputy CEO Vadim Yakovlev said hydraulic fracturing, or fracking, is "inextricably" bound to long-term efficiency goals.
"Improving oil recovery and bringing into development reserves previously considered non-viable are key components of the company's technology strategy," he said in a statement.
By drilling horizontally, some fracked wells can yield more than conventional drillings operations. Gazprom Neft in April said it reached a production milestone at the Yuzhno-Priobskoye field. Most of the oil in the basin, however, is considered "hard-to-recover."
Production started in 1999, more than a decade after discovery. Initial rates of production were around 3,300 barrels per year.
The economics of fracking may be prohibitive. U.S. crude oil production is on the decline because drillers are unable to generate a viable revenue stream at some shale basins because of the low cost of crude oil.
Russian oil supplies to the world are expected to increase slightly to average almost 11 million barrels per day in 2016, a level that's higher by 10,000 bpd from the previous estimate. More narrowly, however, second quarter output was 40,000 bpd lower than the first quarter average.
