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Questions and Answers

Domestic oil and gas exploration and production

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

RAG’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 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. Around 400 people are currently employed at our Austrian facilities, and our collaboration with contractors also helps to secure additional jobs.

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 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 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.

Is it possible to produce synthetic oil and gas?

In principle yes, but in the case of oil this procedure is extremely time-consuming and expensive.

Production of synthetic gas is already a reality. Gas has a host of advantages as an energy source: it can be transported underground and out of sight over long distances, and can also be stored in large quantities, meaning that it is readily available for industry, heat generation and gas-powered vehicles. RAG is closely involved in several research projects focusing on the production of gas (hydrogen and methane) from renewables (such as wind and solar power). The Underground Sun Storage research facility in Pilsbach, Upper Austria opened in October 2015, and is financed by Austria’s Climate and Energy Fund. For further information visit www.underground-sun-storage.at/en.

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.

How much gas and oil does Austria produce?

In 2014, RAG and OMV produced a total of 900,000 tonnes of oil and 1.3 billion cubic metres of gas in Austria. These quantities cover around 10% of the country’s oil demand and about 17% of its gas requirements. RAG’s facilities produce approximately 130,000 tonnes of oil and 250 million cubic metres of gas each year, making a significant contribution to Austria’s energy supply security and cutting its dependence on imports.

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, the Upper Austrian Prealps and in Zistersdorf in the northern Vienna Basin.

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What is oil used for?

It is hard to imagine everyday life without oil. It is used as fuel for cars and aircraft, and for heating. Oil is also an extremely valuable raw material for the cosmetics, pharmaceuticals and plastics industries, and can be found in many products used in daily life, including plastics, paints, medicines and cosmetics.

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These are chemical substances produced using crude oil. Polyvinyl chloride (PVC) can be found in window frames, floor coverings and medical devices such as tubes. Polyurethane can be used to produce foam for upholstery and mattresses, and all styrofoam packaging contains polystyrene.

Without polyethylene it would be impossible to produce thermoplastics such as those used in watering cans, buckets, television housings, plastic containers and vacuum cleaners. Polyamide is found in synthetic fibres such as nylon, and detergents are ethylene oxide-based. From packaging for the food industry, to CDs, DVDs and pharmaceutical products – many of these would not exist without oil.

The same goes for soap, hair spray, detergents, shampoo, toothbrushes, car seats, buckets, foils, mattresses, credit cards, PC housings, paints and window frames – the list is almost endless.

Oil is also used in technology that is essential to Germany’s "Energiewende", or energy transition, such as insulation for power stations and pipelines, in solar cells and in wind turbines. About 45% of the components in a wind turbine are made from oil or petrochemical products, and the blades will not turn without suitable lubrication. A wind turbine requires between 500 and 600 litres of high-quality lubricating oil a year in order to keep turning.

Additionally, various characteristics of depleted oil and gas wells make them suitable for the exploitation of geothermal energy. Deep borehole heat exchangers are installed in the disused wells. These transport heat from deep underground to the surface, as water flows through a closed-loop system. RAG implemented such a project in Neukirchen an der Vöckla in 2012.

Can oil and gas fields be compared with underground lakes?

No. Oil and gas fields are not underground lakes, but covered and sealed layers of sediment. The oil and gas is found in porous rock. 

How does seismic exploration work?

Today the main geophysical exploration method used in the oil and gas industry, and the state of the art, is 3D seismic.

The use of advanced seismic techniques makes it possible to map the geological structure of the earth’s subsurface three-dimensionally, down to depths of 5,000-6,000 metres. Seismic exploration involves generating sound waves and picking up the echoes reflected by the subterranean layers of rock. 

Oil and natural gas are hydrocarbons formed from organic substances by biological, chemical and physical processes in the course of the Earth’s history. They migrate from the source rock and, under the right conditions, accumulate in the tiny pores of subterranean reservoirs.”
Kurt Sonnleitner, Chief Technical Officer, RAG

The differing densities and acoustic properties of underground rock strata make it possible to locate potential oil- or gas-bearing formations. The signals (seismic waves) emitted by special vehicles, known as vibrators, are reflected by the layers of rock and detected by arrays of receivers (geophones), usually with diameters of about 15 centimetres, on the surface. Seismic campaigns normally last for between four and eight months. Powerful computers at RAG headquarters use the data acquired in this way to generate images similar to ultrasound scans. It takes several months to process the raw data accumulated from millions of seismic traces. The results are then subjected to structural and stratigraphic interpretation by RAG’s geologists and geophysicists, enabling our experts to draw conclusions about the probability that oil or gas accumulations have been identified. However, proof of the presence of hydrocarbons can only come from a well.

Further information about "seismic".


What are the benefits of gas storage facilities?

Gas storage facilities underpin Europe’s energy supplies. Natural gas storage has grown in importance in recent years, and is now pivotal to security of supply in Austria and across Europe. The storage facilities operated by RAG currently hold 5.8 billion cubic metres of gas – equivalent to about 70% of Austria’s annual consumption. This infrastructure ensures that eco-friendly natural gas is available whenever it is needed.

RAG has been using depleted gas reservoirs to store gas for over 30 years, playing a key role in security of supply. Today it is Europe’s fourth-largest storage operator, and has converted about half of the gas reservoirs discovered during its 80-year history into storage facilities with long useful lives. This is a figure unmatched anywhere in the world. By progressively expanding its storage capacity, RAG has added a key additional link to its supply chain, and in doing so has developed a sustainable form of gas production.

Completion of the second development phase of the 7Fields storage facility, at Oberkling and Pfaffstätt, in April 2014 expanded RAG’s gas storage capacity to 5.8 billion cubic metres. These storage facilities are used to supply customers in Austria and abroad, and include joint ventures with major multinationals such as Gazprom and E.ON. RAG’s storage capacity is marketed by a wholly-owned subsidiary, RAG Energy Storage GmbH. 

How do gas storage facilities work?

When gas arrives at a storage facility via a pipeline network, it first enters a metering station where it is filtered and the quantity and quality are measured. Injection and withdrawal take place via a number of wells. Where necessary, compressors bring the incoming gas up to the right injection pressure. Since compression raises the temperature, the gas must then be cooled before being conveyed to the wellhead and injected into the natural rock formations. Care must be taken not to exceed the original reservoir pressure. The gas is withdrawn when it is needed, and processed for transportation. It must be dried as it will have absorbed moisture in the reservoir. Once it is on-specification it enters the grid and is transported to the consumer.

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Further information about "storage"

How secure are gas storage facilities?

RAG has demonstrated that it is equal to the technical challenges posed by gas storage, and has the requisite expertise. The company’s state-of-the-art storage facilities are permanently monitored and maintained. Highly skilled staff run the installations from a dispatching centre, working around the clock to maximise efficiency and optimise environmental and technical performance. RAG is also an industry leader in terms of safety, and the entire safety management system at RAG’s installations is based on audited processes. In September 2009 RAG became the first European company to obtain Technical Safety Management (Technisches Sicherheitsmanagement, TSM) certification from the German Technical and Scientific Association for Gas and Water (Deutscher Verein des Gas- und Wasserfaches e.V., DVGW). A surveillance audit carried out in 2014 did not give rise to any objections.

Systematic quality and environmental management, and strict health and safety standards are central to RAG’s philosophy. 

Where are RAG’s gas storage facilities located?

RAG is one of Europe's largest storage operators – its facilities have a total working gas volume of around 5.8 billion cubic metres. The company operates its own storage facilities, while some sites are run as joint ventures. The Puchkirchen/Haag, Aigelsbrunn, Haidach 5 and Nussdorf/Zagling facilities are operated by RAG. It manages the Haidach and 7Fields sites on behalf of joint venture partners.

Further information about "Storage facilities"

Environmental protection

What steps does RAG take to protect the environment?

Environmental protection
When constructing production facilities, RAG takes preservation of the natural environment into account at the planning stage, as part of the environmental analysis. Locations are carefully selected, with the amount of land used as well as emissions and damage to the landscape kept to an absolute minimum. Land is restored to its previous state once a project has been completed. When it comes to constructing permanent facilities such as those for gas storage, RAG is committed to creating compensation areas. We also aim to continually expand cooperation with public authorities, environmental protection experts, planners, local councils and landowners, and to take account of their requirements and interests from an early stage.

Efficient use of energy and resources
We aim to use and distribute the energy required for our operations as efficiently as possible. The commissioning of combined heat and power (CHP) plants in Strasswalchen and Kremsmünster has enabled us to make particularly efficient use of electricity and heat from our production and storage facilities, and to inject energy into the public grid.

A project to reduce vehicle emissions has been in place for several years – this involves upgrading the vehicle fleet so that it is predominantly made up of natural gas vehicles, and building the necessary filling stations. These measures will reduce CO2 emissions significantly compared to conventional fuel types, and in some cases eradicate pollution (especially fine particulate dust) altogether. Our goal is to make it simpler for RAG employees and customers, and the general public to switch to environmentally-friendly and affordable technology.

Reusing natural reservoirs and wells
RAG’s core areas of business are oil and gas exploration and production, and gas storage. In order to ensure the company’s long-term survival, we are constantly enhancing our core operations through innovation, and research and development (R&D). 

Thanks to our use of depleted natural gas reservoirs as gas storage facilities, in the past few years we have made significant strides in enhancing Europe’s security of supply, as well as implementing a new form of sustainable mining. We have now converted about half of the gas reservoirs discovered in our 80-year history into storage facilities with long useful lives – a figure unmatched anywhere in the world.

RAG invests heavily in innovative projects designed to promote decentralised energy supply. This includes geothermal after-use of dry or depleted wells.

One such project – a deep borehole heat exchanger working in combination with a biomass plant – supplies more than 100 households in Neukirchen an der Vöckla in Upper Austria with environmentally-friendly heating sourced from 2,850 meters below ground. This pioneering scheme marks a major step towards integrating conventional and renewable energy production.

Research into groundbreaking technologies
RAG is participating in international research projects aimed at converting renewables such as wind and solar power into gas that can then be transported using existing natural gas infrastructure and stored (visit www.underground-sun-storage.at/en for further information). 


What processes are involved in drilling projects?

What does a drilling site look like when RAG ends production, or when oil or gas is not discovered?

Just a few months after the official completion of production, no traces of the production facility can be seen. There is also no need for post-production measures below ground. Dry wells are filled in accordance with the "Erdöl-Bergpolizeiverordnung". The borehole is cemented in several stages and sealed tightly. Then the drilling site is returned to its original state. Humus and any turf removed during construction are replaced and recultivated. After only a short time, the former drilling site can be returned for use by the land owner. All traces of dry wells disappear within a matter of weeks.

What is the depth and diameter of a well?

In simple terms, a deep well resembles a telescope and its diameter gradually becomes smaller between the surface and the drilling target. At surface level, the diameter usually ranges from 21.6 to 43.8 centimetres, and from 15.9 to 21.6 centimetres at the target or close to the reservoir. RAG’s wells vary in depth between 1,500 and 3,500 metres, depending on the field.

Research and development – a partner for renewables

What is RAG’s position on renewable energy?

Wind + sun = gas – this is the equation behind “power to gas”, a revolutionary new technology.

Power to gas could hold the key to affordable transportation and storage of large quantities of solar and wind energy, making it available around the clock. Together, versatile natural gas and renewables are a dream team. Sometimes the wind does not blow or the sun goes in, while at other times surplus power is produced. For their share of the energy mix to keep on growing over the long term, renewables need a means of compensating for fluctuations in output.

Huge potential
Intermittent renewable electricity output is not the only problem. Something will also have to be done with all the excess power generated by giant wind farms and solar parks at times when demand is low. This surplus energy needs to be stored so that it can be made available during peak periods, but the capacity of the pumped storage plants used to date is far from sufficient. The answer is gas. The gas transportation and storage infrastructure in place has all the makings of a buffer storage system for green power. 

Eco-friendly technology
Energy companies and research institutes in Austria and Germany are working flat out on new approaches to efficient, large-scale electricity storage. Power to gas technology is particularly promising. This involves converting renewable electricity into gas and using existing gas infrastructure to transport and store it. The principle behind this new, environmentally friendly technology could hardly be simpler. Surplus solar and wind power is used to split water into oxygen and hydrogen by means of electrolysis. This is followed by the methanisation stage, in which the hydrogen is reacted with carbon dioxide (CO2). The CO2 can be drawn from the atmosphere or it can come from a biogas or industrial plant. The product of the process is renewable synthetic natural gas. Methane is the main constituent of natural gas, making up around 98% of its content. It can be injected into the gas grid and used in the same way as conventional natural gas to fuel domestic space or water heating, industrial processes, and fleets of gas-powered vehicles, or alternatively for gas-fired electricity generation. The process gives rise to no emissions apart from the oxygen released when the water is split. A pilot plant that has been in operation in Stuttgart for three years is due to be replaced by a larger unit. Today the efficiency of the conversion process is already about 60% – a big step forward in view of the fact that surplus electricity is often not used at all owing to the lack of storage capacity, and instead wind turbines are idled or whole wind farms taken off the grid. 

Using existing gas infrastructure
Thanks to methanisation, electricity can be converted into gas, making large-scale storage possible for the first time. The process solves one of the biggest problems posed by electricity storage – shortage of space. It can simply fall back on existing natural gas infrastructure, in the shape of the pipeline grid and the gigantic storage facilities. Instead of developing and rolling out expensive and elaborate new storage technologies, the power would be transformed into synthetic natural gas and stored in depleted gas reservoirs. 

Underground Sun Storage – stocking up on sunshine

Harvesting, storing and supplying solar energy: RAG is currently testing this groundbreaking approach to energy production and storage in a unique pilot project. Storage of hydrogen, produced using solar energy, is being trialled at a small depleted gas reservoir in Pilsbach, Upper Austria.

Thanks to their storability, renewables are the only energy forms that can act as a straight replacement for conventional energy – and Austria’s gas storage facilities provide the necessary infrastructure. In terms of the strategic development of energy systems for the future, the results of the pilot will be hugely significant for companies, political decision-makers and public authorities. 

The project was selected by an international panel of experts and is being financed by Austria’s Climate and Energy Fund.

For further information visit www.underground-sun-storage.at/en.


What safety measures does RAG take at its facilities?

RAG’s top priority is eliminating the potential risks and dangers facing all of the people employed by the group and those living in the areas where we operate, as well as avoiding damage to the environment.

But preventing accidents does not just mean complying with statutory requirements. We have set a goal of zero accidents in all of our activities, and in order to achieve this we have established a dedicated managerial unit which systematically monitors adherence to our targets on the basis of the internal health, safety and environment (HSE) management system, and supports their consistent application and improvement.

In addition to implementing workplace safety measures aimed at the company’s own employees, we also work closely with contractors on safety-related initiatives. Clearly defined processes, efficient communication and specific guidelines and instructions enable us to meet the highest possible health and safety standards for external contractors’ staff.

All of RAG’s processes are designed to maximise environmental soundness. Minimising energy use and emissions, and using cutting-edge technology and methods to reduce waste and monitor the company’s plant and pipelines are particularly important.

RAG introduced an internal control system for its storage operations in 2011, meaning that it began systematically collecting, analysing and interpreting all energy-related data. This information feeds into energy-saving programmes. In 2013 we implemented an energy management system based on the ÖNORM EN ISO 50001:2011 standard, so that our approach can be externally audited and certified. This is also in accordance with the provisions of the "Bundes-Energieeffizienzgesetz" (Federal Energy Efficiency Act), which transposes the EU’s Energy Efficiency Directive (2012/27/EU). In addition, our storage operations have received the Technical Safety Management (Technisches Sicherheitsmanagement, TSM) certificate from the German Technical and Scientific Association for Gas and Water (Deutscher Verein des Gas- und Wasserfaches e.V., DVGW).

RAG Energy Drilling has obtained unrestricted certification under the international SCC** health, safety and environment standard, and was also certified under the ISO 14001:2004 environmental management standard in spring 2014.


Andrea Schlager, MA
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