RAG Exploration & Production

Questions and Answers

Domestic oil and gas exploration and production

How does Austria benefit from RAG’s oil and gas production activities?

RAG E&P’s production activities play an important part in Austria’s energy supply security and reduce the country’s dependence on imports. This means that domestic production is in the interests of Austria’s entire economy. In principle, all hydrocarbons (oil and gas) are “federal mineral resources”, i.e. they are owned by the Republic of Austria. RAG E&P has contractual rights for the “exploration, development and production of hydrocarbons”. In return, RAG must comply with a minimum exploration obligation and pay various additional levies to the Austrian government, namely mining fees, concession fees, royalties and storage fees.

Who owns the oil/gas found on a particular property?

All hydrocarbon reserves – oil and gas – in Austria are the property of the Republic of Austria. RAG E&P has contractual rights for the “exploration, development and production of hydrocarbons”, and in return is obliged to comply with a minimum exploration obligation and pay various additional levies to the Austrian government, namely mining fees, concession fees, royalties and storage fees. RAG E&P pays land owners a leasehold fee for the duration of the use of their property. However, as with hydraulic engineering and mining projects, land owners do not receive a share of the revenue generated by oil and gas production. This is regulated by the Mineralrohstoffgesetz (Mineral Resources Act).

How are oil and gas formed?

Oil and gas are formed from organic material such as animal and plant remains. Microorganisms and algae that live in water sink to the sea bed when they die and become embedded in mud. This leads to the formation of what is called source rock – a layer of mud which oxygen cannot reach. Over time, the source rock is covered by more and more layers of mud, leading to increases in pressure and temperature. Under such conditions, dead organic material turns into kerogen, and ultimately into hydrocarbons, which then migrate from the source rock to adjoining layers with higher porosity, such as sandstone. If this sandstone is sealed by a layer of rock, the conditions are in place for the formation of an oil or gas field. The process by which organic matter turns into oil and gas began hundreds of millions of years ago below ground, and is still in progress today.

How long will existing oil and gas reserves last?

According to the latest estimates, global oil reserves will not be exhausted for several decades, while gas reserves will last far longer. However, these figures are dependent on future consumption and technological developments.

Where are Austria’s oil and gas reserves located?

There are oil and gas fields in Salzburg, Upper Austria and Lower Austria. RAG carries out oil and gas exploration and production in the Flachgau region of Salzburg and the Upper Austrian Prealps.

What is oil used for?

We are surrounded by crude oil. Virtually no other raw material has had such an impact on and paved the way for progress in our society as oil. Because it has such a huge range of applications, it is an integral part of our daily lives. So many things are based on various oil products – even though it might not be obvious at first glance.

Crude oil plays a fundamental part in industrial manufacturing and is used in many different forms for processing and refining products. Crude oil contains at least 500 different compounds, mainly comprising carbon and hydrogen. This is what makes it so versatile. Oil is part of countless everyday products, and around 90% of all chemical products are oil-based, making it an essential part of modern living and work.

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Living

Anyone building a house depends on oil – it’s the base material for window frames, floor coverings and wire insulation. Oil is used to produce construction foams, paints, varnishes, coatings, insulation and adhesives. Oil products can be found everywhere, even in mattresses, door seals and toilet seats. What’s more, it is essential for producing garden hoses, light switches, bins, switch boxes and wiring.

Travel and transportation

Oil-based products can be found in virtually all the parts that make up a car – even if the vehicle itself is powered by gas or electricity. This list is long: from tyres, lubricating oil, paint and interior trim to foot mats, gaskets, bumpers and battery casings. And electric cars are no different. The asphalt used to build the roads we drive on is also made from oil. And without lubricants, bicycles and trains wouldn’t move an inch. 

Renewable energy

Renewables also require oil: photovoltaic plants need oil products for cables, plugs and wiring, while wind turbines wouldn’t turn without oil. Wind turbines and their rotor blades are not only made of high-quality carbon fibers and thus also of crude oil, but also need several hundred liters of high-quality lubricating oil to run smoothly.

Clothing and leisure

From the latest leisurewear to protective clothing, oil is part of many of the clothes we wear. Sportswear, outdoor clothing, fleece jumpers, leggings, waterproofs and rubberised fabrics are all made using synthetic fibres. And the list doesn’t end there – wetsuits for divers, shoe soles, breathable sneakers, hiking boots and safety vests also contain oil products. The same goes for sports equipment like cycle helmets and tyres, skis and surfboards, balls, tennis rackets and nets.

Food and household products

Oil is too valuable to simply be thrown away, so there has to be a greater emphasis on recycling and reusing in food production, food packaging and households – and that does not just mean plastic containers. Adhesives, firelighters, candles, housings for domestic appliances such as vacuum cleaners and mixers, internal parts for dishwashers, as well as buckets and cleaning sponges all contain oil products, while standard detergents – in their conventional forms – could not be produced without oil.

Medicine, cosmetics and hygiene

Pharmaceuticals and cosmetics are another important application for base materials made from oil. These materials are used to make anaesthetics, dressings and plasters, disinfectants and soap, heart valves, medical devices and tubes. Without oil products, it would be impossible to make nail varnish and nail varnish remover, razors and shaving foam, lipstick and mascara, toothbrushes and toothpaste, or shampoo and body lotion. Aspirin is just one of numerous medications that contain oil products. 

Communication and entertainment

Modern-day communications and the entertainment sector also need oil. 40% of the components in a smartphone are oil-based. And oil is also found in televisions, computers, keyboards, mousepads, games consoles and chargers, and even in books, playing cards and board games.

Environmental protection

What steps does RAG E&P take to protect the environment?

Environmental protection is one of our highest priorities

Together with safety, both environmental protection and responsible stewardship of Austria’s natural resources are paramount in everything RAG Exploration & Production does. Responsibility towards the environment forms a key element of our health, safety and environment management system.

Reusing reservoirs for renewable energy

Our pore reservoirs are valuable resources that will prove their worth over the long term. They preserved oil for millions of years in secure, environmentally friendly surroundings, and they will be used to store energy in the future, too. The possibilities are almost endless: from green gas to hydrogen produced from renewable solar and wind power, as well as geothermal use. With this in mind, all RAG E&P projects consider the potential that reservoirs have for subsequent use as renewable-energy storage facilities.

Environmental protection

When constructing facilities, RAG Exploration & Production takes preservation of the natural environment into account at the planning stage, as part of the environmental analysis. The amount of land used, as well as emissions and damage to the landscape are kept to an absolute minimum. Land is restored to its previous, greenfield state once a project has been completed. When constructing permanent facilities, RAG Exploration and Production is committed to creating environmental compensation areas.

Cooperation with public authorities, environmental protection experts, planners, local authorities and landowners is especially important, and we take account of their diverse requirements and interests from an early stage.

Efficient use of energy and resources

Where we can, we produce the energy required to operate our facilities ourselves, and we use it as efficiently as possible. We are also reducing vehicle emissions by changing over to a predominantly gas driven (CNG) fleet, and rolling out necessary refuelling infrastructure (CNG, LNG). These measures will reduce CO2 emissions significantly compared to conventional fuel types, and in some cases eradicate pollution (especially fine particulate dust) altogether.

Safety

What safety measures does RAG take at its facilities?

All processes at RAG Exploration & Production are designed to be as environmentally friendly as possible. We pay particularly close attention to minimising energy use and emissions, use of waste avoidance technology, and new methods for continuous surveillance and testing of plant and pipelines.

RAG’s safety provisions are assessed by independent auditors on an ongoing basis and are SCC-certified.