After February 24th the global energy outlook changed. The Russian Energy Minister announced on April 20th that in September 2022 a new document will be released covering the Russian Energy Strategy to 2050.
The implementation of decarbonization policy over the next 20 years may shift the focus of Russia’s geological exploration industry from the search for oil deposits to the search for gas deposits, although the Energy Strategy (ES-2035) has yet to factor in an increased role for gas.
The Energy Strategy 2035 highlights the crucial challenge for the Russian oil sector: to increase oil production in Eastern Siberia, the Far East, and the Arctic zone to compensate for declining production in Western Siberia.
Strong price rally. The price of Brent has more than doubled since the start of November and is up almost 20% year-to-date. The last time Brent traded at this level (January 2020) the ruble-dollar rate was at RUB61.5/US$. The reason it is not back at that level is at least partly because of continuing sanctions concerns.
The Russian e-commerce sector is maintaining its strong growth, with turnover rising 23 % in 2019 to US$23 billion. Pre-Covid-19 forecasts were for market growth of around 17% in 2020 – however, all bets are now off. Some e-commerce sectors will race ahead, above that forecast. Others will lag, although the overall growth figure will be impressive.
Trains, Planes, Automobiles (and Boats) Transportation Infrastructure in Russia.
Technology vs geography and climate. Russia’s vast territory, extreme climatic conditions, shortage of efficient navigable inland waterways, and the mistakes of the Soviet system, have all militated against development of an efficient and effective transport logistics system. Now, relatively peaceful conditions since 2000 and technological progress form the background to the more rapid development of modern transportation infrastructure.
In this review, we look at the development of Russia’s most important oil and gas corporations from an ownership, business management and political relationship perspective. We consider what have been the most important events and factors that have shaped their respective histories and explain how each company, and their key managers/owners are positioned today.
The price of Brent rallied 121% from the April 24th low to the June 8th high. The key drivers of that rally include optimism that the demand loss in 2020 will be less than feared and the positive actions and statements from the OPEC+ members. The agreement to extend the period of deepest cuts for an extra month shows a firm commitment by the major producers to maintaining the OPEC+ structure.
Russia is traditionally a major commodity exporter. After successive oil crisis, in 2008-09 and 2014-15, the government has embarked on a program to develop other sectors of the economy, especially those with export growth potential.
Major economies moving towards an easing of the lockdown has raised hope that oil demand destruction will be less and will recover more quickly. The OPEC+ deal started May 1st with strong political commitment from the major producers.
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All Rights Reserved
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All Rights Reserved
