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  • This year the CIS Downstream Summit will be co-located with The CEE & Turkey Refining & Petrochemicals Summit!
Moscow Drinks Upstream Roundtable Summary

Upstream roundtable – Moscow Drinks

 

  1. Oil and Gas Companies must adapt to work with deeper resources and complex hydrocarbon systems

 

The discussion kicked off with a technical take on the changes brought about by the new classification of reserves and hydrocarbon resources, introduced in the beginning of the year.

The key difficulties named at the start of the discussion were resource depletion, and deterioration of the technical base. The implications of these issues were described as both normative and economic in nature.

A key way forward was identified as exploration of deeper resources and working with complex hydrocarbon systems.

Adapting oil companies and gas companies for work with both types of resources was established as the cornerstone of economic efficiency.

 

  1. Mixed views on the success of foreign investment

 

Once the discussion moved to the realm of investment, much was said with regard to the failures of the Russian investment society in foreign funds allocation. Several examples were cited, including poorly allocated investments in Venezuela, Malaysia and Saudi Arabia.

These remarks were partly defeated with comments on relative profitability of the total investment portfolio of Russian oil and gas companies. Moreover, risk diversification strategies were clarified, with focus on accommodating worst-case scenarios.

The role of Chinese partners in upstream industry was broadly discussed, with special focus on Chinese regulatory framework. The framework’s rigidity has led to frictions that hinder project development.

This idea was seconded with the example of Vietnam, where Russia has ventured on several projects. These are however coupled with complicated logistical matters and lack of a favourable tax regime.

 

  1. Russia has plentiful resources

 

The end of discussion focused on optimistic and pessimistic outlooks on the upstream industry from the Russian perspective. Further hurdles highlighted were long-term programs that lack flexibility request by the high market dynamism. However, much optimism came from the fact that Russia’s resources are plentiful, both in oil and gas, and allow the country to maintain its position as a stakeholder. Plans for increased production volumes were discussed, together with hopes for a more flexible legal regime.