Quick Q&A

CIS. And what have been the biggest events or developments in 2005 in the Russian oil and gas industry?

VS. I think that would have to be the rapid growth of Gazprom’s capitalisation and its fast transformation to being the leading international energy company.

CIS. What do you think of the business environment in Russia today for foreign business? Is it easy for companies from outside of the country to invest and does the industry welcome partnerships with foreign companies?

VS. The environment for foreign business in Russia today is becoming increasingly predictable.

The Russian oil and gas industry certainly welcomes partnerships with foreign companies. This can be seen, for example, in the participation of German companies in the forthcoming project of North European Gas Pipeline. Besides, as we know, Gazprom formed the short list of five foreign companies for the future development of Shtockman gas field in Barents Sea.

Foreign investment is very important for the industry. However, I think that, today, the Russian government generates very large financial resources through the high prices on oil and gas and, as such, it should be the main investor in scaled programmes and projects in the Russia’s energy sector.

CIS. Where you see the most potential for Russia to increase its oil producing capacity? How can this be effectively realised?
VS. The biggest potential for increasing Russia’s oil producing capacities lies in Western and Eastern Siberia and in the shelves of the Far East’s seas. Meanwhile, the most potential for increasing Russia’s natural gas producing capacities is Yamal peninsula and the shelves of Barents and Cara seas.

However, in order that we can effectively realise these potential resources, the Russian state needs to play an increasing role in the development and implementation of such scaled projects.

CIS. What kind of technologies are being used today to better locate and exploit the reserves out there?
VS. I think that the traditional geophysics and seismic technologies are still very much in use. However, at the same time, I would highlight as important the so called ‘Microlepton GeoVision Technology’ of oil and gas resources’ location, which has been developed in Russia (see boxout). While many people do not believe in it, so far nobody has proved that it doesn’t work. This technology still needs verification, but this type of advanced technologies could be of interest to oil and gas companies.

CIS. Russia’s distribution system within the CIS region is extensive. How important do you think it is to look beyond those borders, towards Asia Pacific for example?
VS. You are right – it is very important for Russia to pay more attention to the Asia Pacific energy market. We hope that the construction of the Eastern Siberia–Pacific ocean oil trunk pipeline system will be the first step towards linking with China and other countries in the region with fast growing demand for energy.

Russia can play the key role in the supply of energy to various regions of the world, of which the East is especially vital for us. It is for this reason that the Russian Oil and Gas Contractors Union looks forward to the acceleration of Eastern Siberia’s oil and gas reserves’ development.

CIS. What particular projects or developments over the next 10 years or so do you predict will improve those global links?
VS. For gas, I’d say these would be the development of the gas reserves of the Yamal peninsula, the northern shelves, gas reserves in Eastern Siberia and construction of trunk gas pipelines to the East, and finally the rapid development of scaled gas processing facilities.

When it comes to oil, important will be the construction of the Eastern Siberia–Pacific ocean trunk oil pipeline system, development of oil reserves in Eastern Siberia and Yakutia, the scaled reconstruction and modernization of oil refineries, and scaled development of chemical industries.