Beyond the OECD
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Russian Federation
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Russia is and will remain an energy superpower. It has been a reliable supplier of oil and especially of natural gas over decades through politically turbulent times. The events between Ukraine and Russia in early 2006 and again in early 2009 that spilled out into the stability of gas supply in Europe were not symptomatic of imminent Russian deliverability tensions, but they did serve to focus the world on the security of Russian gas supply and raised concerns about future Russian gas deliverability. See more. See the Russian website and the
latest free Oil Market Report in Russian. |
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Moscow: 28-29 September 2009 Moscow: 22-23 June 2009 Moscow: 22 December 2008 Moscow, 22-24 October 2008 Moscow: 30 September – 1 October 2008 |
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| This comes after several years of watching Russia’s growth in oil production diminish as investors lost confidence in the stability or adequacy of Russia’s investment regime. This is a critical issue in world oil markets as Russia had become a key driver of non-OPEC supply growth over the last years. Creeping nationalization in the oil sector, given the circumstances surrounding Yukos and Sibneft now being under state monopoly control, have raised concerns about whether continued investments would be timely, especially given the need to develop more difficult fields in East Siberia and Northern Russia. The IEA’s long-standing concerns about fiscal, legal and regulatory reform (including streamlined environmental and safety regulations) remain unchanged. More transparent and fair third party access to oil and gas transmission systems continues to be a key need to provide for more competition, especially in the upstream natural gas sector. Such regimes will be increasingly critical to ensure an attractive environment for oil and gas company investments to buoy Russian economic growth and global energy market stability. With the era of “cheap” gas over, and an uncertain relationship with Turkmenistan ahead, Russia is facing major choices. It has existing premium price export customers to the West, a commitment to supply huge new markets to the East and at the same time an obligation to supply its citizens. Each of these markets is growing, but existing Gazprom production is declining. The IEA is concerned that these factors will begin to affect Russia’s position as a secure and reliable supplier. A clear win-win option to reduce pressure on gas deliverability is a strategy to slow rising domestic gas demand through intensifying energy-efficiency programmes and more market-based gas pricing. Energy-efficiency targets have been the centrepiece of Russia’s energy strategy, yet low domestic gas prices to date and lack of metering equipment have stymied progress. The synergies between more efficient use of gas resources and GHG emission reductions are clear in Russia, and could be exploited through the Kyoto Protocol mechanisms. This would reinforce Russia’s role as a reliable supplier of natural gas in the coming decades. However, structural and regulatory reform is needed to ensure the efficiency of Russia’s gas sector, as well as to enable an effective implementation of Kyoto Protocol mechanisms. |
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