Russia needs to attract international investment to its oil and gas sector if it is to maintain production in the long run.
That’s according to research and consulting firm Wood Mackenzie, which said the country needed to switch its focus away from the low hanging fruit of conventional onshore projects to more difficult and costly unconventional oil and gas developments.
It said Russia accounted for 15% of global oil and gas production but a mere 7% of investment.
Speaking at an oil conference in Moscow, Ian Thom, Head of Russian Upstream Research for Wood Mackenzie said: “By every measure, the Russian upstream sector is dominated by indigenous companies. Gazprom and Rosneft control the vast majority of Russia’s reserves, production, upstream value and net acreage – with international oil companies barely registering in the top ten.”
He added: “Sizeable tax breaks have been introduced, to help balance the huge costs involved in LNG, tight oil and Arctic offshore developments. We see this as a key step in attracting greater levels of investment and involvement from the Majors”.
Mr Thom said he expected significant growth in these more difficult projects over the next three to five years. He said it could lead to $100 billion (£62bn) of investment by 2025.