6 Oct 2022 12:51

RosGeo currently estimating reduction in geological exploration in Russia at roughly 10% in 2022

MOSCOW. Oct 6 (Interfax) - RosGeo tentatively estimates the decline in geological exploration in Russia in 2022 at about 10% for both hydrocarbons and solid minerals.

"If we expected in April a very large, dramatic, decline in exploration in both hydrocarbons and solid minerals, I can say that in hydrocarbons the reality is that mostly small and medium-sized companies have reduced volumes, while large companies have not reduced volumes of exploration. I can say that we are implementing all projects for Gazprom and Rosneft in full," RosGeo chief Sergei Gorkov told reporters on the sidelines of Minex Russia 2022. "So my assessment is that the overall reduction in parameters by 10% occurred at the expense of small companies. I expected more, to tell you the truth," he said.

"Speaking of solid minerals, it's a very similar situation," he said. "There was first a hiccup in the April - May period, before the season, and then most projects were confirmed. Maybe with a shift in timeframe, but they were confirmed nevertheless. That is why we also estimate a 10% reduction for the time being," Gorkov said.

There are still three months until the end of the year, he said, but so far the assessment is as follows: "There was no collapse this year."

It's hard to say what will happen next year, the RosGeo chief said. This will depend on production volumes, prices for materials and oil and possibilities for export. "Objectively, there is likely to be a reduction," he said. "But by how much? Nobody can yell you right now," Gorkov said.

"RosGeo is consistently boosting the share of solid minerals in its portfolio and aims to increase it to 50%. Among other things, it wants to increase the volume of solid minerals exploration outside Russia. These are mainly the markets of Kazakhstan, Uzbekistan, the nearest friendly markets for us, because, understandably, we will not go to unfriendly markets. In Africa, we will not reduce volumes. We have not reduced them thus far, but I do not see potential for ramping up in Africa, but we do generally see potential for growth in Mongolia, Kazakhstan and Uzbekistan, I've even said once that we have precisely increased volumes by 20% abroad," Gorkov said.