Page 11 - FSUOGM Week 16 2021

FSUOGM POLICY FSUOGM

Russian oil firms struggle to

address flaring

RUSSIA RUSSIAN oil and gas producers struggled to quickly.
reduce flared gas volumes last year because of Surgutneftegaz boasts the highest APG
Moscow had sought to a lack of necessary infrastructure at oilfields, a utilisation, at 99.5% last year, according to the
raise APG utilisation draft government document seen by Reuters document, while Lukoil’s percentage was esti-
to 95% by 2012, but shows. mated in 2019 at 97.6%. Gazprom’s was also
the level was at only Russian government efforts to reduce flar- high at 98.9%, whereas Rosneft’s was a mere
82.6% in 2020. ing and utilise more associated petroleum gas 73.1%.
(APG) have been slow to yield results. In Soviet The overall amount of APG utilised last year
times, associated gas was considered a waste was 94.7bn cubic metres, while the rest was
by-product of oil production rather than a val- flared. The World Bank estimates that Russia
uable fuel, and this belief persisted well into the was one of the four worse flarers in the world
2000s. between 2017 and 2019, alongside Iraq, Iran and
Moscow had tried to raise APG utilisation the US. Together the four accounted for 45% of
to 95% by 2012. However, it reached a peak of all flaring in the period.
88.2% in 2015, from 76.2% in 2013, and has since The unveiling of the government’s report
declined. It rose slightly to 82.6% in 2020 from comes as Russian oil and gas producers strive to
81.5% in the previous year. improve their environmental credentials, given
According to the document, companies need the growing importance of environmental, social
to establish more infrastructure to transport and and governance (ESG) ratings to investors. While
utilise APG, particularly at new projects. Pro- unlike their European peers, Russia’s majors have
ducers are sometimes excused from the most not announced net-zero ambitions, they have
stringent APG requirements at these fields, to unveiled strategies for scaling back their emissions
enable them to recoup their investments more over the coming decades.™

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