Experts at Yakov and Partners have assessed the key changes shaping the global and Russian oil and gas industry. According to the report “Substitution Reaction: New Growth Opportunities in Oil & Gas Through 2035,” oilfield services could become one of the main beneficiaries of the new investment cycle in Russia. The market for oilfield services could expand to RUB 6.4–8.4 trillion by 2035, depending on the industry development scenario.
Under the base-case scenario, the market could reach RUB 4.6 trillion by 2030 and RUB 6.4 trillion by 2035. The accelerated technological development scenario envisages growth to RUB 5.2 trillion and RUB 8.4 trillion, respectively. Experts see additional growth potential in rising demand for high-tech equipment and services for hard-to-recover reserves, the development of new fields, and opportunities to bring Russian technological solutions to export markets.
Complex resources
One of the key factors driving demand for oilfield services is the changing structure of Russia’s resource base. At present, up to 60% of the country’s oil reserves are classified as hard-to-recover. Hard-to-recover reserves account for around 30% of current production; however, when depleted, low-permeability, and waterflooded fields are included, the share of the complex resource base approaches 57%.
Operating statistics also point to the increasing maturity of the conventional resource base, the experts note. Between 2010 and 2024, the water cut in oil production rose from 29% to 52%, while drilling footage increased by 77–80%. At the same time, production volumes have remained relatively stable: 516 million tonnes in 2024 and 512 million tonnes in 2025. In practice, the industry has to drill substantially more just to maintain a comparable level of output.
Investment is rising at the same time. Capital expenditure on oil production increased from approximately RUB 2.5 trillion in 2023 to RUB 3.8 trillion in 2024–2025 and could reach RUB 3.8–4.7 trillion by 2030. According to estimates, bringing more than 10 billion tonnes of reserves that are currently uneconomic into development could provide around 80 million tonnes of additional annual production by 2036.
Staying ahead of the curve
Over the past decade, the share of domestically sourced oil and gas equipment in Russia has increased from around 40% to 70%, while the industry’s current target is to reach 90% by 2030. However, experts note that equipment localization is progressing faster than the substitution of its most technologically sophisticated components, including specialized software, telemetry systems, rotary steerable systems, and certain materials.
The share of domestically developed software used in the oil and gas industry increased from 8% in 2014 to 81% by the end of 2024, yet a number of technological gaps remain. More than 55% of telemetry systems, for example, are still supplied from abroad, while dependence on imported rotary steerable systems was still almost complete as recently as 2023.
Hydraulic fracturing provides a clear illustration of the scale of future demand. Today, the Russian industry has around 180 fully functional hydraulic fracturing fleets, while approximately 300 will be required by 2030. This implies a need to commission around 40 new fleets annually, with approximately 20% required solely to replace retiring and worn-out equipment.
The first mass-produced Russian hydraulic fracturing fleet entered production in 2026, achieving a localization level of 79%. The project became an example of cooperation between machinery manufacturers, independent oilfield service companies, an industry customer, and the government.
A window of opportunity
Opportunities for Russia’s oil and gas sector are emerging against the backdrop of a global investment shortfall. Global upstream investment in exploration and production is estimated at approximately USD 546 billion in 2026, around 30% below the 2014 peak. At the same time, spending on conventional exploration declined from approximately USD 160 billion in 2013 to around USD 50 billion per year in 2023–2025.
Average annual hydrocarbon discoveries have fallen by more than 60% over the same period, from more than 20 billion to around 8 billion barrels of oil equivalent. In 2021, only 4.7 billion barrels of oil equivalent were discovered, the lowest level since 1946. Experts estimate that around 90% of current upstream investment is already being directed not toward increasing production, but toward offsetting natural decline. To maintain supply through 2050, the industry will need to bring onstream more than 45 million barrels per day of new conventional oil production capacity and around 2 trillion cubic meters of new gas production capacity.
Against this backdrop, a significant share of the economic value generated during the next investment cycle could shift toward players that control critical service, manufacturing, and technological capabilities. For Russia, this creates an opportunity not only to equip its domestic production with the solutions it needs, but also to develop a competitive technology offering for export markets.
The talent Cchallenge
At the same time, labor shortages are emerging as a constraint on the new investment cycle. Up to 1.1 million people are employed in Russia’s oil and gas sector, while the number of unfilled positions had reached 27,000 specialists by the end of 2025. By 2030, the shortage of qualified personnel across the fuel and energy sector could reach 52,000 people.
The industry increasingly needs not only traditional oil and gas professionals, such as drilling engineers and geologists, but also industrial software developers and specialists in data analytics and robotics. Government-funded university places in priority disciplines through 2030, industry-sponsored university departments, targeted enrollment programs, and corporate master’s and PhD programs are helping to strengthen the talent pipeline. However, meeting future demand will require both transforming educational programs and accelerating the automation of industrial operations.
Nikita Gorbun , Director of Research Institute
Виктория Трифонова, Старший аналитик
Владимир Москаленко, Консультант
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