Business

A journey to Russia's Siberian oil frontier

TNK-BP's Uvat oil field
Image caption The Uvat oil field is one of the latest discovered in West Siberia

For the past three hours, we have seen nothing but vast, empty, snow-covered land.

The only sign of life is the odd track of wheels on a frozen river disappearing into the distance.

The helicopter is flying through light snow in a north-easterly direction, and the monotony of the landscape and the rotor noise make you feel drowsy.

Then the tower of an oil rig comes into sight. We have arrived at TNK-BP's Uvat oil field.

Production here started in 2009. It is a crucial project for the Russian-British joint venture, as it seeks to make up for a drop in output from its other, maturing fields.

It is a constant battle against the elements: temperatures of minus 30C or less in winter, swamplands that make the area only accessible by helicopter for most of the year and a complex geological make-up of the soil which makes drilling here very difficult.

So difficult, in fact, that 30 years had to pass before technological progress, and the high oil price, made production here commercially viable.

Image caption Tyumen, founded in 1586, was the first Russian fort in Siberia

Yury Masalkin, who is in charge of the operation in Uvat and has accompanied us to the oil field, says the performance of the field is already better than hoped for.

"The yields that we get here are almost double what we expected. That is why we develop this oilfield and even try to speed up this process," he says.

Prosperous city

The Uvat field is the latest chapter in the long history of oil discovery in West Siberia.

On the way back from Tyumen's airport into the city, we drive past the shiny glass palaces of the titans of Russia's oil and gas industry. Lukoil, Gazprom, the big international oil services companies, they are all here.

And, of course, TNK-BP. Some of its most important oil fields are located in the Tyumen region, which stretches all the way from the Kazakh border to the Arctic.

It is a surprisingly smooth ride. Unlike in most other Russian cities, there is barely a pothole in sight, and that at the end of a long Siberian winter.

Money has flowed into regional and federal state coffers ever since the discovery of oil and gas in the 1960s.

Image caption Tyumen's prosperity highly depends on the state of the oil industry

It has made Tyumen, a city of some 600,000 people, one of the most prosperous in Russia.

One of its twin cities is Houston, Texas - America's oil capital.

Tyumen, founded in 1586, was the first Russian fort in Siberia, a crucial staging point for the tsarist empire's eastward expansion. Today it is once again a frontier town.

This time, the fight is not against Tatars and Kalmyks, but the region's complex geology.

Complex geology

Yet another shiny hi-tech building houses a huge storage room.

It contains long shelves with rock and soil samples from TNK-BP's oil fields.

Taken together, they show the geological make-up of the area, all the way from the top of the drill hole to the bottom, allowing the geologists to study the DNA of an oil field.

Igor Dyakonov is the director general of the Tyumen Oil Scientific Centre which houses the "core storage".

He explains why oil companies like TNK-BP have to spend more to find oil in West Siberia.

"The easy, homogenous reservoirs have all been explored and mostly developed," says Mr Dyakonov.

"So we are moving to frontier locations where the geology becomes more and more complex, and for that we need more frontier technology."

One of the companies hoping to benefit from that push is Baker Hughes, an American oil service firm.

In their Tyumen office, a small team of geologists processes oil field data which helps to make the drilling process more precise.

After the economic crisis, the company has now embarked on an aggressive growth strategy.

"This year, we are planning to double our business here in Tyumen," says Maria Starodubets from Baker Hughes Russia.

The company plans to offer drilling services and is setting up its own manufacturing facilities in the region.

Technological progress, new discoveries and high prices will help Tyumen keep its strategic position in Russia's energy sector.

As long as the oil keeps flowing.

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