Russian Oil and Gas Industry:Future under Financial Crisis
Elena TeleginaDirector of the Institute of Geopolitics and
Energy Security of RussiaMember of the Board, Russian Union of Oil
ExportersDoctor of Economics, Professor
Nice, November 12-13, 2008
www.gazo.ru
Russian Oil Production, mln t
Russian Oil Exports, mln t
ForecastEnergy Strategy 2020
ForecastEnergy Strategy 2020
Russian Oil Production Growth Decline (annual %)
Russian Ministry of Energy
www.gazo.ru
ForecastEnergy Strategy 2020
ForecastEnergy Strategy 2020
Russian Gas Exports, bcm
Russian Gas Production, bcm
Gazprom Resources,trln cm
Gazprom Production, bcm
www.gazprom.ru
www.expert.ru
Gazprom Production in 2007 decreased to 2003 level, bcm
Gazprom Investment Program to 2010, bln roubles
www.gazprom.ru
planPreliminary results
All InvestmentCapital InvestmentLong-term Investment including credits to affiliates and strategic projects
Gazprom; 548,6
Novatek; 28,5
Rosneft; 15,5
LUKOIL; 13,7
Others; 46,8
Gazprom
Novatek
Rosneft
LUKOIL
Others
Russian Gas Production, bcm
Total production in 2007 – 653,1 bcm
www.gazprom.ru
Russia: Expected gas availability still growing with increasing participation of independent producers
www.gazprom.ruwww.eurogas.org
Europe: Natural Gas Imports
Main Transmission projects in Eurasia to 2015
www.iea.org
Projects Participants Investment required
Shtokmanskoye Field (Barents Sea)
Gazprom (50%), Total (France), and Norsk Hydro (Norway)
Investment estimated between $15 and $25 bln
Nord Stream Gazprom (51%), BASF (20%), E.OH (20%), Gasunie (9%)
7, 4 bln euro
South Stream Gazprom, ENI Up to 20 bln euro
Yamal-Europe Gazprom 14 bln USD
East Siberia-Pacific Ocean (VSTO)
Transneft 12,5 bln USD
Sakhalin II Gazprom (50%+1 share),
Shell (27,5%), Mitsui (12,5%),
Mitsubishi (10%)
Up to 10 bln USD
Main Oil and Gas Projects
www.gazprom.ru
International&Frontier Sector (EV/Boe vs Commodity Price)
Russian Oil and Gas RTS Index (since November 2007)
www.finam.ru
Oil and Gas
Gasprom
LUKOIL
Rosneft
Oil and Gas Industry need large investments to be encouraged by legal/policy framework
Majors, NOC’s need sufficient operational cash flow to fund CAPEX commitments
Funding Commitments from BANKS are likely to evaporate until 2009, but projects, equipment financing, production (reserve based landing) financing is possible
Need to raise capital:Capital Markets: essentially closedFrom Partners - at a cost
Projects Abandonned and Postponed If not properly financed before the funding crunch and If promoter sufficiently financed to resist credit freeze
Europe and Russia need a consistent and mutually supportive approach between internal market and external dimension policies.
Dialogue at all levels with producers, transit countries, industry, customers is needed - the industry is determined to facilitate the process.
Conclusions
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