Is there oil in Chechnya? An interesting question for those who are far from the oil and gas industry. The answer to it will certainly amaze skeptics who believe that the Chechen Republic only uses eternal subsidies from Moscow and does not give anything. Read about whether oil is extracted in Chechnya and how long it lasts, read in our article.
The first stage of oil production in the republic
Oil production in Chechnya began even when people were completely unaware of the sheer magnitude of what was coming to the surface of the earth. In the distant XVII century, oil was only used as paint or ointment. The first hydrocarbon source was discovered near the village of Mamakai-Yurt and the extracted fuel was used as an exchange coin: oil was exchanged for bread, timber and other goods that came from Russia.
However, despite the fact that oil was nevertheless produced, it was difficult to name it in the full sense of the word that we use now. Active development of oil production began in 1833 after the discovery of the Grozny field, which was destined to become the cradle of Chechen oil.
The second stage and the beginning of industrial production
But even this production did not bring as much hydrocarbon feed as we would like. Modern well drilling methods have not yet been created. They began to think about their creation only in the 60s of the nineteenth century after the whole world was swallowed by "oil fever." Decent industrial production in Chechnya began in 1893, after the first oil fountain scored in the Starogroznensky district.
Oil reserves in Chechnya were also attracted by famous foreign companies, such as Rockefeller Standard Oil and Shell.
New century
After the revolution of 1917 and the Bolsheviks came to power, all the bowels were declared state property. All foreigners were driven out of the country and domestic production began.
The Great Patriotic War became a powerful impetus that forced to produce more crude oil in Chechnya. Whether there was oil in Chechnya did not bother anyone - it should have been there. The mobilization of all sectors of the economy has led to the fact that production volumes increased to 4 million tons of oil per year.
A gradual increase in production was observed in subsequent decades. The last and maximum peak in hydrocarbon production occurs in 1971. Then almost 22 million tons were mined, which by those standards amounted to 7% of the total Russian production.
Perestroika times
However, all good things come to an end. The average daily flow rate was falling, deposits were depleted. By the end of the seventies, oil production in Chechnya was reduced by 3.5 times, which led to an almost complete elimination of the industry.
Later, in the eighties and nineties, new fields were discovered, which were supposed to lift the industry to the same level. Of course, this had little effect - the last time in its history, production amounted to 5 million tons per year.
Experts, after making simple arithmetic calculations, determined that during the existence of the Soviet Union, the oil produced in Chechnya amounted to 400 million tons.
After the USSR
The collapse of the Soviet Union led to significant changes in the industry. The confusion that was going on in the new Russia did not allow to keep under control all sectors of state scale.
The chaos that was happening in the country that was at the forefront of modern history allowed the formation of Ichkeria, an unrecognized state entity in the territory of the former Chechen-Ingush Autonomous Soviet Socialist Republic. In this regard, all crafts and deposits were declared public property. But, despite this, this did not affect the real incomes of the population. The main reasons are:
- gradual decline in the mining industry;
- failure of existing wells due to wear and tear of Soviet equipment;
- reduced production rates at new fields due to improper operation;
- complete collapse of the industry in the region.
Despite the fact that CRI ceased to exist only in 2000, the full management of the development of new fields and the exploitation of the existing ones by decision of the government was transferred to Rosneft in 1998. By that time, in Chechnya, oil was extracted in the amount of only 850 thousand tons.
Today, the region is dominated by subsidiaries of PJSC Rosneft - Grozneftegaz. Fifty-one percent of the shares are owned, which is not surprising, the oil and gas corporation itself. And the government of Chechnya owns the remaining 49%.
Grozneftegaz has all the licenses for the development, operation, exploration of all fields in the region. The company successfully copes with its work and in the first three years of activity was able to improve production rates to 1 million 800 thousand tons of liquid hydrocarbons.
Is there oil in Chechnya today?
Different experts answer this question in different ways. The published annual report on the status of hydrocarbon reserves and subsoil generally indicates that oil reserves belonging to categories A + B + C1 + C2 in the Chechen Republic are small - 33 million tons. Given that reserves belonging to category C2 are only potentially estimated, the real prospective volume that can be mined is significantly reduced.
However, among those who worked in the fields of Chechnya back in Soviet times, there is an opinion that in the mountainous and inaccessible regions of the republic there are huge deposits of black gold, which at the moment because of the technological insolvency of the industry is simply impossible to produce.
How true is this assumption? There are many such examples in history when people inwardly felt the presence of oil under their feet, but those around them considered them mentally unhealthy, and investors refused to invest their capital. The most striking example is the Texas Spindletop Field. All experts unanimously declared that there was no oil there and never was, when suddenly at one fine moment a fountain began to beat from an exploratory well. Maybe Chechnya is waiting for the same fate, but so far the statistics inexorably leads to the fact that soon the oil in the region will end, and, along with this, the oil industry in the republic will be put to an end.
Production Indicators from 1993 to 2014
As noted earlier, statistics are not on the side of the oil field in Chechnya. According to official figures, the maximum volume for the last 25 years was 2.5 million tons in 1993. In the region of two million tons, oil was extracted for another three years in a row - from 2005 to 2007. A stable decline in production begins in 2008 and continues to this day. In 2014, the smallest volume in the history of the Chechen trade was recorded - only 450 thousand tons.
