Modeling the Impact of New Technologies on the Financial Performance of Russian Vertically Integrated Oil Companies

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Abstract

The article explores the impact of the oil recovery factor on the financial performance of Russian vertically integrated oil companies. Special attention is given to hydraulic fracturing technologies (HFT) and rotary steerable systems (RSS), which are critical for enhancing oil extraction rates and oil recovery factor, particularly for hard-to-recover reserves (HTR). Sanctions have complicated access to these technologies, leading to a deterioration in the financial results of Russian oil companies in 2022-23. The study identified a decrease in revenue due to the restricted activities of foreign oilfield service companies and an increase in the discount on Urals crude oil. Using the financial model of Russia’s largest vertically integrated company, Rosneft, it was demonstrated that improving extraction efficiency through the adoption of technologies
can increase the company’s value by 8%. The analysis highlights that delayed technology replacement directly threatens production sustainability, especially for HTR reserves, which require advanced extraction methods. The study’s findings align with the resource-based view: effective management of technological resources is one of the key factors in the competitiveness of oil companies. Under the conditions of sanctions pressure, it remains necessary for Russian oil companies to reduce technological dependence.

About the authors

Alexey Melovatsky

HSE University

Author for correspondence.
Email: amelovatskiy@hse.ru
ORCID iD: 0009-0003-2432-478X

Postgraduate student

Russian Federation, Moscow

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