Drop in Oil Output in Russia to Remain Uncompensated With New Fields

President of Russian oil giant LUKoil Vagit Alekperov said that more than 80 percent of oil on the territory of Russia is extracted from oil fields that are on the late stages of development and operation.

ST. PETERSBURG (Sputnik) — The decline of oil production in Russia will not be compensated by discoveries of new hydrocarbon reserves in the coming years, President of Russian oil giant LUKoil Vagit Alekperov said Thursday.

"Today, all major assets, which is more than 80 percent of oil on the territory of Russia, is extracted from [oil] fields that are on the late stages of development and operation. They were opened before 1990… The fields' natural cycle certainly reduces output," Alekperov told reporters.

According to Alekperov, the industry needs new oil deposits to compensate for the decline in production. However, there is no way of making many of them operational in the short-term, he stressed.

LUKoil, for example, launched exploration in the Filanovsky field to stabilize its output, but similar new exploration projects are rare, Alekperov concluded.

The Vladimir Filanovsky oil field is located in the northern part of the Caspian Sea. It was discovered in 2005. Commercial drilling at the oil field is scheduled to begin at the end of 2015, according to a statement on LUKoil's website.

LUKoil is a global leader in the production and refining of crude oil resources. It is world's largest privately owned oil and gas company by proven oil reserves, and operates in over 40 countries.