Russia experienced a second year of record oil drilling in 2023, providing further evidence of the country’s resilience in the face of Western sanctions.
The surge in activity was accompanied by a recovery in both volumes and value of Russian oil exports, a striking illustration of how the country’s fossil fuel industry has been a crucial funding source for President Vladimir Putin. Russia is much more self-reliant in its oilfield services than previously thought.

In the first 11 months of 2023, according to industry data, Russia drilled production wells with a total depth of 28,100 kilometres. For the entire year of 2023, Russian production drilling is expected to exceed 30,000 kilometres. This increase comes despite Western countries’ pressure on the country’s energy sector. The sector has been the target of sanctions ranging from import bans and price caps to export bans on technology. Last year, the United States sanctioned dozens of companies producing drilling equipment and developing new production techniques to limit Russia’s future extraction capabilities. In 2022, the European Union imposed a comprehensive restriction on equipment, technology, and services exports to the Russian energy industry.

Today, only 15% of the national drilling market relies on technology from so-called “hostile” countries. Before the invasion of Ukraine, Western companies dominated the market. Chinese companies have taken over, securing lucrative contracts that European drilling firms once held.
Moreover, the withdrawal of major Western oilfield service companies from Russia had minimal impact, essentially leaving their local subsidiaries intact. Most of these operations were sold to local management, preserving the accumulated expertise over the years.

In the context of relatively stagnant production, the frantic pace of drilling also hints at some long-term issues that may develop for the Russian oil sector due to Moscow’s international isolation. Russia needs to maintain production from its oldest wells, while new projects that would sustain production in the decades ahead must adapt to the country’s changing circumstances. The primary reason for the growth in drilling in Russia is the need to launch new wells, as production fields are depleting.
The depletion of old fields must be compensated by new drilling on existing sites, known as brownfields, or by new projects called greenfields. Most analysts thought the latter solution would pose problems for the Russians. Indeed, the new developments planned before the war had been designed with Western technologies that became unavailable due to sanctions. Based on the 2023 figures, it appears that the Russians have found solutions.