Russian multi-billion investments in oil and gas development

The document suggests investments of about 225-250 billion USD, Including more than 40 billion USD from the government. The state program is calculated till 2030 and aims at providing an “energetically safe development of the national economy” through production of 40-80 million tons of oil and 190-210 billion cubic meters of gas per year. It is 8-16% of the current level of oil production and 32-35% of gas production in Russia.

The ministry has sent the program for approval to other ministries and concerned agencies. The document will be reviewed by the Presidium of the Government on 17 November, “Kommersant” reports.

The Ministry of Natural Resources has already received 39 applications for shelf licenses from four companies: “Gazprom”, “Rosneft”, “Gazprom oil” and “Zarubezhneft”. At the same time the companies plan to conduct exploration activities on another 39 sites located mostly in the Arctic and Far Eastern seas.

Read also: Large Russian interest for Arctic licenses

According to the ministry, development of most projects is “economically inefficient” under the current legislation. The main causes that are hampering development are lack of funding for exploration, poor infrastructure development and presence of administrative barriers.

According to Valery Nesterov from the investment company “Troika Dialog”, the current developments on the shelf do not correspond to the existing potential. Besides, the developed state program does not provide measures to get rid of the barriers private companies meet. State oil companies do not have the necessary technologies for realization of this plan. All offshore projects have been made either by Western companies (Sahalin-1 and Sahalin-2 by Exxon Neftegas) or private like Lukoil, operating in the Baltic and the Caspian Seas. – The actual production volumes listed in the strategy are under question, the expert continues, - It is difficult to predict them.

Written by Sergey Andaykin