According to the Energy Information Administration, Russia holds the world's largest natural gas reserves, second-largest coal reserves, and the eighth-largest crude oil reserves. Those rankings are impressive, but they don't give quite an adequate picture of Russia's energy story and how it stands to change in the coming years.

Russia ignores shale gas
Two months ago, I wrote about Russia's decision to leave its shale gas reserves alone for now. The country has the biggest natural gas reserves in the world, and the conventional gas resources that make up those reserves are more than enough to meet domestic consumption and export demands for decades.

Conventional resources are much cheaper to exploit, and developing complicated unconventional gas resources won't benefit Russia right now. For example, if a boom ensued from shale gas production similar to the one the U.S. is experiencing now, that would drive down the price of natural gas in Europe, where Russia provides 25% of the natural gas consumed.

A new deal
After taking a pass on shale gas, Russia's next big announcement was aimed squarely at increasing oil production.

Russia and Saudi Arabia have been the world's top two oil producers for years, producing 10 million and 9 million barrels per day, respectively. In May, Saudi Arabia surpassed Russia in production according to at least one analysis, as production from Russia's maturing conventional oil fields in Western Siberia continues to decline. Saudi exports, meanwhile, rose to their highest level in five years.

Acknowledging that when it comes to oil, unconventional resources may be its only route to keeping production levels at the country's stated goal of 10 million barrels per day, Russia announced it was changing its tax code to allow for more foreign partnerships in its Arctic waters. In the days following, ExxonMobil (NYSE: XOM), Statoil (NYSE: STO), and Eni (NYSE: E) all inked deals with Rosneft, the Russian state-owned oil company. Here's a quick recap of what went down:

  • ExxonMobil: Signed a $3.2 billion deal in April to explore the South Kara Sea. In return, Rosneft grabs a 30% stake in a West Texas project, 30% stake in an Alberta project, and an option to buy a 30% stake in 20 other projects.
  • Statoil: In May, the Norwegian company inked a deal to take a 33.33% stake in four offshore areas. Rosneft may also get stakes in some of Statoil's projects offshore Norway.
  • Eni: Signed a deal in April for a 33% stake in a joint venture project covering two blocks in the Barents Sea. Rosneft will gain access to projects in North Africa, and ultimately the U.S. and northern Europe.

Russia pays close attention to shale oil
Last week, Forbes columnist Christopher Helman clued us in to what may wind up being the brightest jewel in Russia's energy crown: the Bazhenov oil shale.

This particular oil shale is estimated to be the size of Texas and the Gulf of Mexico -- combined. At about 80 times the size of the U.S. Bakken shale, the Bazhenov sprawls under 570 million acres in Western Siberia, and its average oily pay zone is about 100 feet thick. So far, test wells are averaging a flow of about 400 barrels of oil per day, which is on par with results in the Bakken.

One energy analyst goes as far as to suggest that, given the proper attention, the Bazhenov could produce 1 million barrels per day by 2020. And, unlike the dearth of infrastructure that is hindering the transportation of oil out of the Bakken, there are plenty of pipelines already in place in Russia. The lines serve the same declining fields that country is trying to compensate for to begin with. The decrease in production of the mature fields should coincide nicely with the Bazhenov ramp-up, as far as midstream infrastructure is concerned.

Foolish takeaway
So there you have it. Russia says no to shale gas, opens up treacherous Arctic waters, and signs joint ventures in varying foreign onshore projects to gain experience for developing what may be one of the most important oil resources of our day.

New technology has opened up the Bazhenov for production, which really reaffirms the notion that technology likely has us wedded to fossil fuels for the next two decades. Anything that can make exploration and production faster and cheaper is going to be in high demand, especially as companies are forced to target tricky reserve locations. The high price of oil makes such exploration possible right now. As oil is produced in difficult terrain, the marginal cost of production increasing puts pressure on oil prices. With that in mind, consider three stocks that Motley Fool analysts believe will spike while oil is around $100 per barrel. Check out this free report onĀ three stocks that stand to gain with increasing oil prices.