Exploring technological advancements in oilfield services: Prospects for the development of Arctic oil and gas fields
Authors:   Bashneftegeofizika JSC, Adiev Rustem J. , Beloshitskiy Alexey V. ,   Lusin Institute for Economic Studies of the Kola Science Centre of the Russian Academy of Science, Beloshitskiy Timofei A. ,   Bashneftegeofizika JSC, Birukova Vera V. ,   Business School of Ufa State Petroleum Technical University (UGNTU)
Published: December 2023

The article discusses the key challenges associated with the economic development of the oilfield service industry within the climatic, geological, and infrastructural conditions of the Arctic. The evaluation of the Arctic's contribution to the total hydrocarbon production in Russia is an important research problem, which is particularly relevant amidst the current international political tensions. The study aims to unveil aspects of research and development (R&D) prospects of oilfield services in Russia's Arctic regions and adjacent territories. The research identifies characteristic features of economic development associated with economic activity risks. These include infrastructure and technological constraints linked to the distance from federal R&D and industrial centers; insufficient financial resources and experience for large project implementation by local authorities; the intricacy and labor intensity of work, coupled with a shortage of specialists possessing the necessary skills. The study establishes that the complexity of developing Arctic oil and gas fields is mitigated by the application of innovations and highlights the vulnerability of domestic companies to import supplies, which are currently inaccessible due to Western sanctions. The results presented offer a comprehensive view of the promising facets of the innovation-driven and technological development of the oilfield services industry in the Arctic. They propose specific measures geared towards enhancing production efficiency in the oil and gas and oilfield services sectors for implementation by the government. The study's conclusions constitute its scientific novelty and affirm that the sector under consideration is characterized by the following aspects: 1) the demanding nature of work necessitating substantial financial assets and professional competencies of often scarce labor market participants, alongside the utilization of innovative technologies to curtail production costs; and 2) a constrained pool of oil and gas market participants diminishing competition in the oilfield services market and enabling vertically integrated oil companies to dictate prices to service organizations, thus limiting opportunities for the industry's innovation-driven and technological development. The study's conclusions hold significant practical potential and are recommended for incorporation into territorial, regional, and federal programs for the social and economic development of Arctic regions. These findings contribute to the innovation-driven and technological revitalization of the oilfield services industry, an integral element in developing the resource base of Northern territories. Additionally, they provide avenues for further scientific exploration, delving into logistic, financial, technological, corporate, and other economic aspects specific to participants in forthcoming development processes.