Russia plans to develop hard-to-recover oil and shale but is hampered by Western sanctions over Moscow’s annexation of Crimea from Ukraine in 2014.
Rosneft has started to drill a first exploration well at the hard-to-recover Domanik formation in the region of Orenburg, near the border with Kazakhstan.
The company expects its geological reserves to rise by 70 million tonnes of oil and 23 billion cubic metres of natural gas once the exploration work is over at the project next year.
BP had originally agreed to take part in the project, however it decided not to proceed following the sanctions.
Some companies do not consider the Domanik formation to be the shale oil, but a limestone project.
Geologists are unanimous, though, that even though shale and limestone formations are different geological structures, they both constitute unconventional oil resources. Both are extracted through hydraulic fracturing, or fracking.
The sanctions were designed to prevent Russia countering sluggish output from conventional wells by tapping these hard-to-recover reserves which require newer extraction techniques like fracking, an area where it relies on Western technology.
Rosneft said it will use fracking at the Domanik formation.