The Russian Oil Services Market Could Grow by 7% in 2026
From 2021 to 2025, the oil services market grew on average by 13% per year, with about two-thirds of the growth attributable to inflation rather than an expansion in work volumes, the report notes. By 2028, the growth rate is expected to slow to around 8% per year.
Oil and condensate production in Russia is expected to plateau at 510–520 million tons in the coming years, but maintaining this level is becoming increasingly resource-intensive.
Between 2021 and 2025, drilling increased by 11%, and the number of employees in the sector rose by 16%, while production decreased by 2%.
The financial state of contractors is putting pressure on the industry. According to the report, in 2025, 39% of oil services market revenue was in the zone of financial risk, up from 27% in 2021—companies did not increase debt, but the cost of servicing it rose. Operators' investments in production exceeded available cash flow for the first time by 20%, with 93% of CAPEX going to contractors compared to 76% in 2021, analysts indicate. The wear and tear of the drilling rig fleet has reached 55%, and their numbers have not increased for several years.
"The price of a ton of oil has not increased for the operator—it has increased for the contractor. To maintain production at a plateau, the market is increasing work volumes and staffing, and the margin for services is currently absorbing the difference," explains Dmitry Kasatkin, managing partner at Kasatkin Consulting.
According to Kasatkin Consulting, the market structure by segments remains relatively unchanged over time.
Independent services account for 46%, while 49% are made up of players that are part of or affiliated with vertically integrated oil companies (VIOC), and 5% belong to international entities. Analysts identify drilling support, cementing, drilling fluids, and mechanized extraction as the fastest-growing and most profitable sectors, while those related to geological exploration are the least so. No comments were provided by oil service companies.
Senior oil and gas and transportation sector analyst at Euler, Andrey Polishchuk, believes that the market will grow mainly due to work volumes against a backdrop of OPEC+ quota easing—this, he estimates, should increase drilling and demand for other work from service companies. Open Oil Market CEO Sergey Tereshkin notes that, according to data from the U.S. Energy Information Administration (EIA), oil production in Russia declined from 9.2 million barrels per day (b/d) in January to 8.85 million b/d in July, while the International Energy Agency (IEA) reported a drop from 9.26 million b/d to 8.76 million b/d. Companies, the expert explains, are increasingly maintaining production levels without drilling new wells. However, Mr. Tereshkin adds, there is potential for growth—actual production in Russia is more than 1 million b/d below the OPEC+ quota, but realizing this potential depends on how safe maritime shipping in the Black Sea will be. As reported by S&P Global, in August, deliveries of Russian oil through Black Sea ports fell more than twice compared to July, to 380.3 thousand b/d, with total marine exports declining by 12%, to 3.83 million b/d (see "Ъ" of September 5).
Dmitry Prokofiev, Director of External Communications at NEFT Research, states that the need to increase investments in exploration and production, including a shift towards more complex and expensive technologies, creates a steady demand for service services. However, the fact that the pricing factor remains dominant signals limitations to the physical growth of the market. According to the expert, high debt levels, expensive borrowing, and reduced profits even with increased revenue (see "Ъ" of May 7), as well as technological dependence on imports, are systemic issues facing the industry. In this environment, those who can manage debts and invest in technology will gain an advantage, believes Mr. Prokofiev.
Source: Kommersant
