April 2013

Diploma thesis

INNOVATION MANAGEMENT in Russian oil refining

Student: Dobrynina Alexandra

Scientific adviser: Kochetkov V.V.

2

Relevance & Timeliness

• Despite difficulties trying to define it innovation process in companies is steadily becoming a practical tool to be measured, taught and managed

• Different industries & markets need different innovation strategies:

• Level of development;• Goals;• Level of government

support;• Market structures;• Market players’ vision, etc.

• Lack of innovation management in some industries

• Sphere of interests and working competences:

• Industry analysis• Market analysis

CRUDE OIL REFINING

3

Methods

• Descriptive methods: graphs, charts, statistics analysis

• Econometric analysis:• Panel data on major oil refineries in

Russia in 2000-2011

• Dependence of oil refineries characteristics on investments in modernization & innovation of plants

• Volume of refining (proxy for plant volume

• Technology of plant’s development (refinery depth)

• Plant’s export potential (residual oil share in export)

• Interest rate as alternative investment

• Strategic modeling to find way outs from «vicious circle»

Oil industry in Russia

RussiaWorld

0%

20%

40%

60%

80%

100%

120%

40% 46%

21% 32%

40% 22%

heavy oilpetroldiesel

Refining structure

4

Expected results & principal conclusions

Hypothesis of Path Dependence in oil refining: negative influence of Russian export structure (low

export of light refined products, high volume of export of fuel) on indicators of innovation and

investment activity of Russian oil refineries – to be empirically proved

The situation can’t be changed by market forces. To “break” the circle there should be external shock

made by government. That’s why The Russian government has recently started stimulating Russian

refineries by setting technological requirements, differentiating excise taxes for more and less refined

products, enforce Russian oil refineries to make modernization and investments programmes

Russian oil refining is in “vicious circle». It gets revenues from residual fuel oil export and doesn’t want

to make long term investments in refineries’ modernization

Thank you for your attention !